After Iraq’s Oil Ministry approved Inpex, the big oil corporation of Japan, to sell its share of Iraq’s biggest oil discovery, ‘Block 10’, Russia is set to take control of it for 20 years.
Iraq’s Eridu oil field is estimated to have reserves of seven to ten billion barrels based on preliminary estimations. Speaking exclusively to OilPrice.com last week, senior Russian oil sector insiders stated that the genuine figure might be as much as 50% higher than the higher figure of that bracket. Either way, Russia and its main geopolitical ally, China, seek to control the entirety of the largest oil discovery in Iraq in the previous 20 years, the Eridu field, which is located in the Block 10 exploration and development zone. According to an exclusive interview with OilPrice.com, Moscow, and Beijing want to “end [the] Western hegemony in the Middle East [that] will become the decisive chapter in the West’s final demise” and to keep Baghdad closer to the new Iran-Saudi axis. This is in line with their goal of keeping the West out of energy deals in Iraq. The large Eridu discovery is located in Block 10 region; this week, Iraq’s Oil Ministry approved Inpex, the big oil corporation of Japan, a prominent ally of the United States, to sell its 40% share in the territory. This allows Lukoil to acquire complete control over the oil-rich zone.
Throughout Block 10, Lukoil has owned 60% of the shares, with the Japanese company owning the remaining 40%. But since March, it has been trying to figure out how to drive Inpex—and the last vestiges of Western influence in the region—out of the Block. In March, Block 10’s reserves, comprising the whole Eridu field, were officially approved for development by Iraq’s state-owned Dhi Qar Oil Company (DQOC). Block 10 is located in southeast Iraq, a short distance south of the massive oil reserves in and around Nassirya and about 120 km west of the main oil export route from Basra. Although the enormous Eridu field had not yet been discovered, the contract for Block 10—awarded to Lukoil and Inpex in 2012 during Iraq’s fourth licensing round—gives a comparatively high compensation per barrel rate of US$5.99. Following some initial tests, the Iraqi Oil Ministry stated in 2021 that it anticipated peak production from Eridu to be at least 250,000 barrels per day (bpd) by 2027. Given the delays in development since 2021, the date at which that will be achieved is now towards the end of 2029. Senior Russian oil industry sources exclusively spoke to OilPrice.com last week and believe peak production could run at least 100,000 bpd higher than the previous figure, contingent on whether the new reserves estimates are correct.
Back in 2021, before the United States ended its “combat mission” in Iraq at the end of December 2021, at the very least, it was obvious that Washington was aware of China’s and Russia’s long-term plans in the nation, as well as how Iraq was manipulating the United States. “It’s […] clear that certain countries and partners would want to hedge and test what more they might be able to get from the United States by testing the waters of deeper co-operation with the Chinese or the Russians, particularly in the security and military space,” said Dana Stroul, the deputy assistant secretary of defense for the United States at the time, in a moment of insight. This opinion may have been applied to not only Iraq but also to the majority of the Middle Eastern nations at the time, especially Saudi Arabia and the United Arab Emirates. However, as I thoroughly explain in my new book on the new global oil market order, this deep insight had little influence on Washington at that point and provided no obstacle to China’s or Russia’s ongoing drive to completely drive the United States out of the Middle East.
According to local sources that spoke with SANA, the US has resumed theft of Syrian oil hours after an attack. Tanker trucks were seen being taken out of Syria as part of a 148-vehicle convoy that crossed the border.
Subscribe to GreatGameIndia
Russia’s successful takeover of the oil and gas sector in Iraq’s problematic semi-autonomous region of Kurdistan in the north has made the country’s ultimate goal clear. This took place amid the chaos that ensued after the region was brutally suppressed following a September 2017 vote by 93% of its citizens for complete independence from Iraq. As I also fully evaluate in my new book, Rosneft, the state’s business proxy, employed three strategies to ensure Russian influence over Iraqi Kurdistan. The final phase of the plan to essentially merge the Iraqi Kurdistan region with the rest of Iraq is currently moving forward at full speed as a result of Russia’s manipulation of the region into such a toxic standoff with the central Iraqi government in Baghdad. In light of this, Russia and China are currently taking steps to ensure their control over the remainder of Iraq; the most recent illustration of their larger plan in action is the evacuation of Inpex from the huge Eridu field.
The two nations have ample opportunity to utilize numerous field exploration and development agreements, along with numerous low-key “contract-only” agreements, with Chinese and Russian companies, to establish a more robust geopolitical presence throughout the nation, encompassing its vital infrastructure. It was decided at a recent Iraq Cabinet meeting that the nation should now fully support the implementation of all provisions of the comprehensive “Iraq-China Framework Agreement,” which was agreed upon in principle more than a year prior to being signed in December 2021. This pact has a striking resemblance to the expansive “Iran-China 25-Year Comprehensive Cooperation Agreement,” which was first made public worldwide in my article published on September 3, 2019, and which I thoroughly analyze in my recently published book.
A fundamental component of both agreements is that China will receive at least a 30 percent discount on all oil, gas, and petrochemicals it purchases, as well as first refusal on any new projects involving these resources in Iraq over the term of the agreement. Beijing’s permission to establish factories all around the nation, together with the corresponding development of infrastructure to support them, is another important aspect of the Iraq-China Framework Agreement. This includes railway connections, which are crucial to its “Belt and Road Initiative” and are managed by management personnel from Chinese businesses operating in Iraq. The completion of the Iranian railway network will precede the completion of the railway infrastructure in Iraq. Work on electrifying the main 900-kilometer railway that connects Tehran to Mashhad in the northeast started in late 2020. In addition, plans were made to build a high-speed train route from Tehran to Qom to Isfahan and to expand this upgraded network all the way to Tabriz in the northwest. Home to several important locations for oil, gas, and petrochemicals as well as the beginning of the Tabriz-Ankara gas pipeline, Tabriz will be a major hub for the 2,300-kilometer New Silk Road, which will connect Tehran to Urumqi, the capital of western China’s Xinjiang Province. Along the way, it will connect Kazakhstan, Kyrgyzstan, Uzbekistan, and Turkmenistan before eventually entering Europe through Turkey.
As I also fully analyse in my new book, these plans in turn link into concomitant plans by Russia and China to transform the entire southeast region of Iraq—which culminates in the major oil export hub of Basra—into a region crisscrossed by Russian and Chinese-controlled oil and gas fields and transportation hubs. The clearance by Baghdad of roughly IQD1 trillion (US$700 million) for infrastructure projects in Al-Zubair, a city south of Basra, was one such landmark agreement. China’s significant engagement in the projects, according to the city’s governor at the time of the agreement, Abbas Al-Saadi, was a component of the overall “oil-for-projects” proposal inked by Beijing and Baghdad in September 2019 and was part of the broad “oil-for-reconstruction and investment” agreement.
The announcement from Al-Zubair was made soon after Baghdad had given a large contract to a different Chinese company to construct a civilian airport in place of the military installation in the capital of the oil-rich Dhi Qar governorate in the south. Gharraf and Nassiriya, two of Iraq’s largest oil fields, are located in the Dhi Qar region. China has stated that it plans to finish building the airport by 2024. This area is located northwest of Basra and directly north of the massive Eridu oil field. As part of the airport project, a number of cargo buildings and roadways will be built, connecting the airport to the city’s town core and, separately, to other important oil regions in southern Iraq. This was then followed by another agreement that falls under the 2019 “oil-for-reconstruction and investment” pact that calls for Chinese businesses to develop Al-Sadr City, which is close to Baghdad, at a cost of between US$7-8 billion.