Iraq to Seek Chinese Help – Shai Oster

NA-AN203_CHINAO_20070619191235.gif From the Wall Street Journal:

Iraq ‘s leaders face major challenges in fixing the nation’s ailing oil-production system, a necessary part of any effort to fund its rebuilding. For help, they are turning to one of the world’s most voracious oil consumers: China.

Iraqi President Jalal Talabani , set today to begin a weeklong trip to China, is expected to ask Beijing to revive a $1.2 billion oil-exploration deal it established with Iraq during Saddam Hussein’s rule. He is coming to Beijing with a delegation that includes his oil minister.

Plagued by sabotage and theft amid the country’s escalating violence, Iraq’s oil fields have failed since the U.S.-led invasion in 2003 to return to production levels before the war.

Meanwhile, China needs more oil to help sustain rising car-ownership rates and economic growth that have made the country the world’s No. 2 oil consumer, after the U.S.

China imports nearly half of the seven million barrels of oil it consumes a day and has been expanding overseas oil operations from central Asia to Sudan.

But Beijing is likely to move cautiously in Iraq, some analysts say. Chinese oil operations in Africa have suffered killings and kidnappings in recent months. And the rising overseas criticism of Beijing’s relationship with Sudan , where China is a major oil producer, may make Beijing wary about operating in a place as hazardous and politically sensitive as Iraq. [Full Text and Subscribers Only]

See also: Iraqi President Courts Oil Cooperation in China from Khaleej Times.

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