China Outflanks U.S. With Iraqi Oil Deal

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The New York Sun

ACRE, Iraq — China has secured Baghdad’s first post-Saddam Hussein oil deal by reviving a 1997 concession to exploit reserves on the al-Ahdab field south of the capital.

The two countries are expected to sign an agreement later this month that will earn the state-controlled China National Petroleum Corp. a fixed price for every barrel it produces in Iraq.

While China opposed the Iraq war and stood back from post-conflict rebuilding, Beijing has quietly outflanked its global rivals to grab a large slice of Iraq’s oil industry.

The pioneers of its overseas quest for fuel are already exploring vast tracts in the country’s Kurdish north.

With an extensive foothold in the only part of the country where new oil wells have been built since 2003, Chinese firms are already believed to have more personnel than their American rivals.

America has contested every step of China’s drive over a decade to expand its oil industry in central Asia and Africa, viewing the push overseas as a boost for Beijing’s diplomatic standing. Beijing’s success in the new battleground represents a double blow for Washington, whose troops are still engaged in fighting for Iraq’s security.

As stability returns, Baghdad hopes that its output can triple to six million barrels per day.

The latest Chinese outpost is a mountain camp.


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