A man near the Nihran Bin Omar oil field north of Basra, Iraq, Wednesday, March 22, 2023. In a departure from previous years, all of Iraq’s foreign licences during its latest oil licensing round last year went to China, instead of European and American oil majors that used to have a significant presence in the Middle Eastern country.
In 2019, the two countries inked an “oil for construction” deal. Under the agreement, Iraq sends oil to China, and China helps rebuild war-torn Iraq. Iraq’s Prime Minister Mohammed Shia' al-Sudani visited Texas in April and personally invited oil companies to buy licences this year, but in vain. In Iraq’s latest licensing round, it was mostly so-called technical services contracts for sale under which oil majors get a flat fee per barrel of oil they extract.While Chinese companies are similarly driven by profit, there is also a national imperative to extract oil - China needs to buy foreign oil to meet domestic demand and has been importing nearly half of Iraq’s oil.