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MEOG POLICY MEOG

Iraq’s oil-for-projects

deal with China on hold

IRAQ IRAQ has put its 20-year oil-for-projects deal Iraqi economy.
with China on hold amid its worsening eco- “This agreement was supposed to gain
nomic crisis, local media reported on August 26. momentum after the formation of the new gov-
The agreement reached last year is expected to ernment but it seems that this government has
see China support a $10bn joint fund to develop no intention to activate the agreement ... it is clear
reconstruction projects, including a number of that the US is pressing this government to cancel
refineries. In return, Iraq will supply China with it,” he said.
100,000 barrels per day (bpd) of oil. Iraq’s parliament approved a new govern-
However, the coronavirus (COVID-19) pan- ment in May headed by Mustafa al-Kadhimi
demic, a collapse in oil prices and OPEC+ have as prime minister, ending a six-month politi-
plunged Iraq’s economy into a severe recession. cal deadlock. But the government still has not
This has left the government unable to cover state formed a council to oversee the joint fund with
spending, including civil servants’ salaries and China, which would also cover the construction
pension payments. of new schools, hospitals and a railway.
Iraq has just withdrawn almost $1bn from its Meanwhile, US oil, gas and power firms
joint fund with China to pay civil servants, Aliq- signed some $8bn in deals in Iraq last week
tisad said, citing unidentified officials. during a visit by al-Kadhimi and other top Iraqi
“Iraq has decided to freeze the agreement with diplomats to Washington. The US not only has
China ... it has not officially annulled the agree- sought to curb Iranian influence in Iraq, but also
ment but suspended its implementation because counter the country’s growing economic ties
of internal political and security developments, with China.
the financial crisis,” the news agency said. Aliq- As part of its push to develop its refining sec-
tisad quoted a member of Parliament’s economy tor, Iraq awarded a $3.75bn contract this month
and investment committee, Ali Saadoun, who for the construction of new facilities at the
extolled the benefits of the Chinese deal to the 210,000 bpd Shuaiba refinery outside Basra.™

Germany urges Turkey, Greece

to call off naval exercises

EAST MED GERMANY on August 27 called for ten- coast next week. Greece has taken part in war
sion-generating naval exercises in the eastern games with France, Italy and Cyprus, another
Mediterranean to be halted in an effort at easing country at odds with Ankara over alleged Turk-
the standoff between Turkey and Greece over ish infringements of its continental shelf during
contested gas exploration rights that Berlin is the course of drilling. And France, the most
anxious could descend into “catastrophe”. aggressive EU ally of Athens in that it has called
Germany’s foreign minister, Heiko Maas, for Turkey to face sanctions over claimed illegal
who is trying to mediate between the two coun- drilling, has beefed up its military presence in the
tries, said the precondition for talks was an end eastern Mediterranean with two fighter jets and
to military manoeuvres. “For sure the parties will a naval frigate.
not sit down at the table when warships are fac- Germany is reluctant to move ahead with
ing each other in the eastern Mediterranean,” he sanctions against Turkey, instead hoping talks
was reported as saying by the Guardian. can make the required headway.
During shuttle diplomacy between Athens Egypt is another country that takes issue
and Ankara this week, Maas said the current sit- with the extent of Turkey’s claims to hydrocar-
uation in the eastern Mediterranean was akin to bon exploration rights in the Mediterranean. On
“playing with fire” where “every little spark can August 27, Greece announced it had ratified an
lead to catastrophe”. accord on maritime boundaries with Egypt.
Turkey has announced it will hold live-fire Turkey has said the pact between Athens
military exercises off its eastern Mediterranean and Cairo infringes its continental shelf. The

P8 www. NEWSBASE .com Week 35 02•September•2020