China and Iraqi Oil

[Surferbeetle]

Don't mean to imply that we can't all get along however it's interesting to watch what's happening:

Sinopec's business model from wikipedia:

Sinopec, or the China Petroleum and Chemical Corporation (SSE: 600028, NYSE: SNP, HKEX: 0386) (simplified Chinese: 中国石化, traditional Chinese: 中國石化), is one of the major petroleum companies in China. Sinopec's business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products; storage and pipeline transportation of crude oil and natural gas; import, export and import/export agency business of crude oil, natural gas, refined oil products, petrochemicals, and other chemicals. In 2008, it is ranked 16th by Fortune Global 500, up from its rank of 17 in 2007.[2] In 2007 it ranked first in the Top 500 Enterprises of China ranking.[3]

CNPC's business model from wikipedia:

The China National Petroleum Corporation (CNPC) (simplified Chinese: 中国石油天然气集团公司, traditional Chinese: 中國石油天然氣集團公司, Hanyu Pinyin: Zhongguo Shiyou Tianranqi Jituan Gongsi)[2] is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China. As of 2006, it was the second largest company in the world in terms of number of employees.

The China backgrounder from the EIA:

With China's expectation of growing future dependence on oil imports, the country has been acquiring interests in exploration and production abroad. CNPC has acquired exploration and production interests in 21 countries spanning four continents. During 2005, CNPC announced its
intentions to invest a further $18 billion in foreign oil and gas assets between 2005 and 2020. In Sudan, CNPC has invested more than $8 billion in the country’s oil sector, including investments in a 900-mile pipeline to the Red Sea. In October 2005, CNPC finalized the purchase of PetroKazakhstan, whose assets include 11 oil fields and licenses to seven exploration blocks. In
December 2005, this purchase was complemented by the completion of the 600-mile Sino- Kazakh oil pipeline that will deliver 200,000 bbl/d of crude oil to China by the end of 2006. In 2005, some of CNPC’s other overseas investments included purchasing Encana’s oil and gas assets in Ecuador and PetroCanada’s oil and gas assets in Syria.

From the CFR, Author: Stephanie Hanson, News Editor China, Africa, and Oil

China's booming economy, which has averaged annual 9 percent growth for the last two decades, requires massive levels of energy to sustain its growth. Though China relies on coal for most of its energy needs, it is the second-largest consumer of oil in the world behind the United States. Once the largest oil exporter in Asia, China became a net importer of oil in 1993. The International Energy Agency projects China's net oil imports will jump to 13.1 million barrels per day by 2030 from 3.5 million barrels per day in 2006. China currently imports about half its oil supplies from the Middle East, and that percentage is projected to grow in coming decades. Yet the extent of the country's energy demand has also compelled China to push into new markets, and particularly Africa.

Africa holds a fraction of the world's proven oil reserves—9 percent compared to the Middle East's nearly 62 percent—but industry analysts believe it could hold significant undiscovered reserves. As a result, China is seeking to increase its oil imports from the continent. It now receives about one-third of its oil imports from Africa, 9 percent of the continent's total exports in 2006 (by contrast, the United States purchased 33 percent of that year's exports from Africa). China's biggest suppliers in Africa as of 2006 were Angola, the Republic of Congo, Equatorial Guinea, and Sudan. It has also sought supplies from Chad, Nigeria, Algeria, and Gabon.

Interactive graphic of Iraqi Oilfields from the FT

Iraq’s early attempts to attract foreign investment into its oil sector have been largely unsuccessful so far, as Tuesday’s auctions of six oil fields and two gas fields have yielded only one sale. BP of the UK and China’s CNPC agreed to Baghdad’s tough pricing terms, and will turn the South Rumaila field into the world’s second largest oil producer. However, the remaining oil and gas fields, including the highly sought-after West Qurna field, did not attract high enough bids to meet the Iraqi oil ministry’s conditions.

FT reports the Iraqi governments bid requirement for the Rumailia and Kirkuk fields as "$2.00 per extra barrel"

Khour al-Zubeir Port in Basra

Al-Baṣrah (Arabic: البصرة‎; BGN: Al Basrah, also called 'Basorah) is the capital of Basra Province, and had an estimated population of 1,052,200 as of 2003.[1] Basra is also Iraq's main port, although is incapable of deep water access, which is handled at the the port of Umm Qasr. The city is the historic location of Sumer, the home of Sinbad the Sailor, and a proposed location of the Garden of Eden. It also played an important role in early Islamic history, being built in 636 CE, or 14 AH. It is Iraq's second largest and most populated city after Baghdad.