By John Lee.

China’s ZhenHua Oil [Jinhua] has signed a service contract to develop the southern part of the East Baghdad oil field.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said that the signature of the contract was significance for Baghdad because it is the first project in the capital.

The development of the field will raise the production of the Midland Oil Company.

As part of the deal, the project will also provide social services, and see the construction of a housing complex with 2000 residential units.

(Source: Ministry of Oil)

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has met with Mr Lu Ygiang, the President of the Chinese company Jinhua, and his entourage.

The two parties discussed during the meeting about enforcing the bilateral cooperation and the development of East Baghdad oil field.

The Minister confirmed he was keen to prepare the appropriate work environment for the company, while Mr Ygiang said his company was ready to start work after “the completion of all the procedures“.

Late last year, the Ministry of Oil signed the initial form of the contract to develop the East Baghdad field with Jinhua.

(Source: Ministry of Oil)

By John Lee.

Iraq Oil Report reports that the China ZhenHua Oil Company, a subsidiary of state-owned arms manufacturer Norinco, is poised to make two new investments in Iraq’s oil sector.

It says the company is forming a new oil trading joint venture with the State Oil Marketing Organization (SOMO) and is negotiating the upstream development of the East Baghdad oil field.

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(Source: Iraq Oil Report)

China’s state-run Zhenhua Oil has agreed to develop the southern part of the East Baghdad oilfield.

Under the agreement, Zhenhua will increase production at the field by 40,000 barrels per day above current production, and provide gas for power stations in the Baghdad area.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said that this contract is different from previous service contracts, “because the form of the contract was modified to serve the public interest, and to depend on the local employment as 80% of the project staff.”

The contract will also involve the construction of an industrial city and “residential integrated city.

Jim Bei, the manager of the Chinese company, said his company was keen to cooperate with the Ministry of Oil to develop the field and raise its production.

Zhenhua appears to also be involved in the nearby Ahdab oilfield.

According to Reuters, the East Baghdad fiel is estimated to have around 8 billion barrels of crude reserves, and the potential to produce 120,000 barrels of oil per day.

(Sources: Ministry of Oil, Reuters)