Page 10 - MEOG Week 15

MEOG PoLiCy MEOG
years on the value of the oil it recovered. located around 60 km to the north-east of the main southern export terminal of Basra, the Majnoon oilfield is one of the largest in the world, with an estimated 38bn barrels of oil in
place (OIP).
Originally awarded to Royal Dutch Shell
(45%), Petronas (30%) and Iraq’s Missan Oil Co. (25%) in 2009, the field was taken over by the state-owned Basrah Oil Company (BOC) at the end of June 2018, with operations and mainte- nance contracted to Chinese company Anton Oilfield Services Group (Antonoil) and the US company KBR.
The International Energy Agency (IEA) has projected output of 550,000-950,000 bpd by 2020, and 700,000-1mn bpd at some point in the 2030s, although owing to the flooding and recent political upheavals – plus the effects of the coro- navirus – the timing has slipped. With regard to the major physical challenge of the prevalent flooding in the area, China aims to shore up the site against future potential flooding and to raise output to at least 500,000 bpd by the end of May 2021.
This strategy of gradual encroachment is a Chinese classic, of course, currently being employed across the Asia-Pacific region as well
as the Middle East.
The modus operandi is simple: offer lots of
money to cash-strapped countries (which most emerging economies are) that are tied in to future project developments, then leverage this into the building out of on-the-ground infra- structure projects (that have employment and revenue benefits for the host countries as well), and then turn the screw by inveigling the host countries into giving China extremely preferen- tial terms on something it wants (in the Middle East it is oil and gas and land transit routes, and in Asia-Pacific it is other natural resources and international port usage).
Although in the Middle East, China is still partly trying to cover its intentions by using non-headline companies on ‘contractor-only’ specific work projects – just like CPECC – it does not take much digging to find the real interest.
Not only is CPECC a subsidiary of Chinese oil behemoth CNPC, but it is the very same com- pany that was recently awarded the same type of contract ($121mn for ‘engineering work’) for Iraq’s super-giant West Qurna-1 oilfield, also located very close to Iraq’s principal oil hub of Basra. These “encroachments” may well in time change the geopolitical structure of the Middle East – to Western disadvantage.™
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w w w . N E W S B A S E . c o m Week 15 15•April•2020