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Thread: China Marches Past USA to Stake a Claim to Iraq's Oil

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    China Marches Past USA to Stake a Claim to Iraq's Oil

    China marches past USA to stake a claim to Iraq's oil

    China has secured Baghdad's first post-Saddam Hussein oil deal by reviving a 1997 concession to exploit reserves on the al-Ahdab field south of the capital.

    Acre, Iraq
    Telegraph 07 Sep 2008

    The two countries are expected to formally sign an agreement later this month that will earn the state-controlled China National Petroleum Corp (CNPC) a fixed price for every barrel it produces in Iraq.

    While China opposed the Iraq war and stood back from post-war rebuilding, Beijing has quietly outflanked its global rivals to grab a large slice of Iraq's oil industry. The pioneers of its overseas quest for fuel are already exploring vast tracts in the Kurdish north of the war-torn nation.

    With an extensive foothold in the only part of the country where new oil wells have been built since 2003, Chinese firms are already believed to have more personnel than their American rivals.

    America contested every step of China's drive to expand its oil industry in central Asia and Africa for more than a decade, viewing the push overseas as a boost for Beijing's diplomatic standing.

    Beijing's success in the latest battleground represents a double blow for Washington whose troops are still fighting daily for Iraq's security. With the return of stability, Baghdad hopes that its output can triple to six million barrels per day.

    The latest Chinese outpost on the ground is a mountain camp pitched 1,400 metres above sea-level by CNPC, which has signed a contract to conduct the exploration of a 44 x 12 mile tract. The sensitivity of the Chinese presence is betrayed by the camp's heavy fortifications. It is overlooked by watchtowers and surrounded by a square earth berm. Scientists in the 100-strong team only leave to conduct surveys in heavily-armed convoys. Fierce-looking members of the Surchi, a notorious local tribe, stand guard at the gate.

    The chief CNPC geologist at the site, Chao Shu-he exudes a missionary zeal. "The Chinese have opened the door to co-operation," said Mr Chao. "China is more and more developed and it's our patriotic duty to contribute to development, even if we are far from home."

    Oil executives complain that China is the only big country prepared to work in Iraq. DNO, a Norwegian firm that produces 10,000 barrels a day in Kurdistan, said it solicited "dozens" of well-known firms before signing a drilling contract with another Chinese firm, Great Wall Drilling.

    "The Chinese are strong in service contracts but not in exploration rights," said Asti Hawrami, the Kurdish oil minister. "They are not taking on the risks but they are playing a strong, important role in the industry."

    "China wants security of oil supply but they also want a finger in every pie," said Paul Stevens, an expert at Chatham House. "The Chinese now sit like death's head at the feast, waiting for the slightest chance to get into Iraq."

    Clifford Chance, the international law firm, reported last month that up to 30 billion barrels of oil lies beneath the Kurdish territories, where fire worship around the pools of crude at the surface has a long tradition.

    Such estimates have drawn a rush of wildcat firms but, because of a political dispute between the regional government and Baghdad, big American and British oil firms are notably absent.

    Western majors have been warned off by threats from Hussein al-Shahristani, the Baghdad oil minister, to blackball firms seeking production in the north. However that injunction does not appear to have applied to CNPC.

    As the American military presence in Iraq shrinks, the al-Ahdab deal is one of a host of signs that Beijing is well-placed to rival US ties to post-war Iraq.

    An affinity with Chairman Mao Zedong, a leader who killed 10 times as many as the vilified Saddam, drew President Jalal Talabani to China last year. But when President Talabani paid $100 million for Chinese-made Kalashnikov rifles, America was so displeased it sent all Iraqi security forces on a training programme to use US M4 rifles.


    All that very real sacrifice -- to bring democracy to Iraq, and now the Chinese are invited to be a part of the future. I wonder if Cheney et al will be giving the American people an explanation. Lets hope there are some good answers!

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    Being that most of our own economy is in China and we had to borrow money from them for Bush's big "Economic Stimulus Plan" from a few months ago..I am not to shocked over this sadly. Its a huge slap in the face for the American people and especially the (US)soldiers there doing the dirty work.

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