Tuesday, December 1, 2009

Iraq Bans Chinese Oil Major

As reported before, the Iraqi Oil Ministry warned China’s Sinopec oil giant in August and October 2009, that it would be banned from future oil deals if it continued to work in Kurdistan. In the middle of this year Sinopec purchased the Swiss-Canadian Addax Petroleum that is a co-operator of the Taq Taq oil field in Irbil, Kurdistan, one of two that produces petroleum in the region. Sinopec was allowed to participate in the first international bidding round for Iraq’s oil fields in June 2009, but was later told that it would be shut out of the second round unless it ceased its business dealings with the Kurds. That threat has now come to fruition as Sinopec was refused when it tried to pay participation fees in mid-November for the December 2009 bidding. Sinopec’s banning is due to the dispute between Baghdad and the Kurdistan Regional Government over who has the power to sign contracts and develop Iraq’s future oil reserves. Currently the Oil Ministry calls all of the deals the Kurds have signed illegal, and blacklisted the companies. Sinopec is the newest added to that list. This argument has delayed the technical issue of increasing Iraq’s oil exports, which are the major source of income for the country, as the country’s politicians are caught up in a never ending argument.


Reuters, “UPDATE 1-Sinopec bid to take part in Iraq oil deals rebuffed,” 11/22/09

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Iraq’s Oil Exports And Revenue Drop In May

In May Iraq suffered a drop in international oil prices. Its exports dipped as well.