Pricing is given as the reason for the disinterest shown by major oil companies toward the Iraqi auctions, but there is more to it than that. The investments required to develop these fields are very large and the recovery horizon is long. There is a quite understandable reluctance to make long term deals with a government that may or may not be around in a year, let alone ten years. If another government decides to unilaterally change the deal, there is nothing an oil company - US, Chinese, or other - can do about it.

We all know that China uses a lot of oil, that Chinese oil companies are large, and that they are aggressively pursuing investment, even in areas posing higher risks than most other companies are willing to take. But really, so what? How does this negatively impact anyone else's interests?

It could be argued that China's willingness to pay bribes and to cut deals with corrupt and repressive governments is not a good thing for Africa (in particular), but it does no harm to oil markets. If the Chinese weren't pumping oil out of places like Angola, Sudan, and Iraq, where local companies lack the money and/or expertise to develop resources and other foreign companies are unwilling to invest, they'd be competing to buy oil from other producers, pushing prices even higher. The more oil the Chinese pump, the cheaper oil gets - for everyone. Of course the Chinese are taking risks - a future government in any of these countries could easily nationalize their investments and there is very little they could do about it - but how does that hurt us?