ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Business

Chinese, Russian oil companies vie for firmer foothold in Mideast

 (placeholder image)
CNPC has a contract to boost output at Iraq's Rumaila oil field.   © Reuters

TOKYO -- Russian and Chinese oil and gas companies are cutting a stronger profile in the Middle East as U.S. rivals increasingly channel their energies into North America's shale gas boom.

     Iraq, which after Saudi Arabia boasts the region's largest crude deposits, began accepting bids on rights to its oil and gas fields from foreign companies in 2009. Such Chinese contenders as the China National Petroleum Corp. and China National Offshore Oil subsequently secured interests in five oil fields, including the prominent Rumaila field.

     Just last November, the state-owned CNPC and Indonesia's state-run Pertamina struck deals to acquire respective stakes of 25% and 10% in the West Qurna oil field in southern Iraq from Exxon Mobil of the U.S.

     "Chinese firms are actively entering the kind of volatile regions that U.S. and European companies would rather keep a safe distance from," explains an official with the Japan Oil, Gas and Metals National Corp. "They are also building deep relationships with the Iraqi oil ministry."

     And in light of China's ravenous and growing appetite for natural resources, its state-affiliated companies at times look beyond profits when moving to acquire oil rights.

     Chinese companies are not the only ones seeking to increase their presence in Iraq. Russian firms Lukoil and Gazprom have snatched up interests in the West Qurna-2 and Badra fields, respectively. Turkish, Malaysian, Angolan and South Korean state-run energy companies have also entered the fray with their own acquisitions. In fact, more non-Western companies are now operating in the country than are oil giants from the U.S. and Europe.

     Major U.S. companies have in recent years rushed to exploit shale oil and gas deposits in North America, increasingly eschewing overseas projects that come with greater financial and security risks. Companies from emerging markets appear happy to pick up the slack.

     In this environment, industry watchers are closely monitoring the fate of a 1.4-million-barrel-a-day field in the United Arab Emirates capital of Abu Dhabi. Rights to the large-scale field expired last month, and the government has granted bidding privileges to Japan's Inpex, a CNPC affiliate and a South Korean state-run company. Successful bids from South Korean or Chinese firms may spell the end to roughly half a century of major Western and Japanese companies' domination in the region.

     Meanwhile, in war-torn Syria, the Assad government struck a deal to develop offshore oil and gas reserves with a Russian firm late last year. But with peace negotiations still in their early stages, it seems unlikely that new rigs will go onstream in the near future.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media