Iraq awards major oil deal to Chinese company Geo-Jade

• Geo-Jade and Crescent to partner
• Developing oilfield near Basra
• Refinery and power plants planned

Iraq’s oil minister Hayan Abdel Ghani on Wednesday signed a large contract with a Chinese company and its local partner to develop an oilfield in the south of the country and build a refinery, a petrochemical complex and two power plants, according to the state press agency.

Geo-Jade, the Chinese company, and the local company Crescent Basra signed an agreement in principle for the project last year, according to Iraqi News, without disclosing financial details. 

The projects will be built near the southern port of Basra, the scene of major power and hydrocarbon projects over recent months, including oilfield development and a solar plant being built by France’s TotalEnergies, the official news agency said.

“These projects with Geo-Jade represent a big leap in the development of Iraq’s oil wealth and supporting of the national economy,” Abdel Ghani said.

Iraq, which is due to hold parliamentary elections in November, has been expediting oil and gas development in part to wean itself off reliance on supplies of gas and electricity from Iran. Earlier this year, UK energy major BP said it was returning to Iraq to develop four oilfields in the northern Kurdish Kirkuk region.

And last month a subsidiary of state-run PowerChina signed an agreement with the ministry of industry and minerals to build four petrochemical plants within the Karbala Industrial City, according to an online newspaper.

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The latest contract includes the development of Tuba oilfield near Basra to expand output from 20,000 barrels per day (bpd) to 100,000 bpd. The deal also includes building a 200,000 bpd capacity oil refinery, a petrochemical plant with capacity of 620,000 tonnes of polyethylene and polypropylene per year, a fertiliser plant with output of 520,000 tonnes per year and two power stations.

The power projects will generate 1,200 megawatts of electricity and comprise a conventional 800MW plant and a 400MW solar power facility, the state-owned Basra Oil Company said on Monday.

Officials did not disclose the value of the contract, one of the largest oil and power deals to be awarded to a Chinese company in recent years.

Geo-Jade was one of several Chinese companies that were awarded oil concession sites last year in the fifth and sixth licensing rounds staged by the oil ministry.