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Chinese companies dominate Iraq bidding round

Licenses for 29 projects are on offer. (Image source: Adobe Stock)

Exploration & Production

Chinese companies have won 10 out of the 13 projects awarded so far in the three-day bidding process for the Iraq’s sixth licensing round, according to press reports, with Iraqi Kurdish companies KAR Group winning a further three

Winning bidders are reported to include CNOOC, ZhenHua, Anton Oilfield Services, Sinopec, Geo-Jade, Zhongman Petroleum and Natural Gas Group (ZPEC) and UEG.

Licences for 29 projects are on offer, a key objective being to ramp up output of natural gas for domestic use. Iraq is currently dependent on Iran for much of its gas supply. Iraq is looking to derive more than 3,459mn standard cubic feet of gas per day and over one million barrels of oil per day from these licensing rounds, according to a statement from the office of Prime Minister Mohammed Shia’ al-Sudani.

Iraq is the second largest OPEC oil producer after Saudi Arabia, currently producing around 4.3mn bpd. However, it is yet to harness the full potential of its huge oil and gas reserves, with security concerns and unfavourable contract terms acting as a deterrent to badly needed foreign investment. Gas flaring is also a serious issue. In 2022, the country was the second-largest source of gas flaring worldwide, according to World Bank data, although some initiatives are now underway to capture and use the associated gas rather than flaring it.