Chinese companies enter the Iraqi oil market as major players decline.
Chinese companies enter the Iraqi oil market as major players decline.
2025-08-04 03:31
Shafaq News – Baghdad
A number of independent Chinese oil companies have expanded their investments in Iraq, OPEC’s second-largest producer, entering a market previously dominated by major oil companies, while some of these international firms have begun to reduce their presence in the country, according to a Reuters report.
Smaller Chinese companies, run by former experts from major state-owned companies, are seeking to double their production in Iraq to 500,000 barrels per day by 2030, benefiting from more lucrative contractual arrangements, lower development costs, and rapid growth opportunities, executives told Reuters.
These companies achieved notable success in 2024 when they won half of Iraq’s exploration licensing rounds, amid a clear government shift toward accelerating oil projects as Baghdad seeks to increase its production to more than 6 million barrels per day by 2029.
These companies include Geo-Jade Petroleum, United Energy Group, Zhongman Oil & Gas, and Anton Oilfield Services.
The Iraqi Ministry of Oil has affirmed its keenness to attract international companies, but it no longer objects to Chinese expansion, particularly from independent companies, given their flexibility and speed of implementation, along with their competitive financing and use of low-cost Chinese resources.
Baghdad’s adoption a year ago of “profit-sharing” contracts instead of “fixed fees” was a factor that attracted these companies, which have a greater capacity to bear risk compared to major companies such as Shell and ExxonMobil, which have reduced their presence in the Iraqi market.
Ali Abdul Amir, from the state-owned Basra Oil Company, said that independent Chinese companies offer significant advantages, such as rapid financing and reduced costs. They also accept lower profit margins in exchange for long-term contracts, making them a suitable partner for Iraq’s oil sector expansion plans.
shafaq.com
