BAGHDAD: Iraq has reached an initial agreement with China’s state-run Zhenhua Oil company to develop the southern portion of the East Baghdad oilfield, the Iraqi oil minister, Jabbar Al-Luaibi, announced yesterday.
Speaking at a press conference held at the ministry, Al-Luaibi said that the deal aims at increasing the field’s production to 40,000 barrels per day (bpd) within five years.
Under the agreement, the Iraqi minister added, the Chinese company has committed to building an “oil residential complex,” which will comprise various residential units and integrated service facilities, such as schools, nurseries and medical clinics.
Fifty per cent of the project’s total labour force will be Iraqis, with a plan to reach 80 per cent “gradually,” Al-Luaibi noted.
Officials at the ministry said that the increase in the East Baghdad crude production “would help feed nearby refineries and power stations and free up more oil for exports from the southern region.”
In recent years, foreign companies have refrained from investing in the East Baghdad oilfield given the fact that it is surrounded by a huge residential area. The East Baghdad oil field, which is owned by the state run Midland Oil Company and has around 8 billion barrels of crude reserves, produces about 20,000 bpd.
