Unrest in Iraq May Affect China's Petroleum Corporations

Posted: 06/23/2014 01:06:07   Edited: 06/23/2014 01:06:04  Clicks: 856
In recent days, ISIS (Islamic State of Iraq and the Levant) has captured most of areas in north of Iraq, making the situation in Iraq more serious. Analysts consider that violence promoting will endanger the future development of petroleum in Iraq and affect the future of global oil increase production.
 
In recent years, output of petroleum in Iraq increases gradually, producing 3.3 million barrels daily. Otherwise, Iraq has large areas of oil fields which have abundant reserves and are still not exploited. Currently, other oil producers have limitation for increasing. For that, Iraq is considered as an oil producer which may drive global petroleum to increase in the future.
 
Anthoine Alf, the head of Oil Market & Industry Department of IEA (International Energy Agency) said,” Without doubt, Iraq is the most important country for producing oil in the future beside North America.” IEA estimates that the output of Iraq will reach to 6 million barrels daily in 2020. The increasing output about 270 barrels will account for 60% of estimated increasing production of OPEC.

So far, the unrest has forced an oil refinery in Iraq to be closed. But it has not spread to main oil producing areas in the south of Iraq. At present, 90% of Iraqi exporting oil comes from the oil fields in south. With the influence of situation in Iraq, global oil prices have raised from 109 USD per barrel to 114 USD per barrel, having reached to a new high spot for 9 months. Proven oil reserves in Iraq is about 11.5 trillion barrel, accounting for 10% of global proven reserves, locating at the third place next to Saudi Arab and Iran.
 
Since 2008, petroleum giants in western including BP, Exxon Mobil and Shell, CNPC and CNOOC have invested trillion dollars in Iraq for oil exploitation. It is reported that China has become the largest investors in petroleum industry in Iraq. If the situation affects oil producing, China’s petroleum corporations may involve in conflict.
 
Alf considers that if the situation continues turmoil, China’s petroleum corporations may turn to Saudi, Iran and Russia to seek new oil resources. 
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