China and Iraq have inked a $ 3 billion deal with Beijing insisting that the agreement, a win-win situation for both the countries, does not "harm" the interests of any third party.
BEIJING: China and Iraq have inked a $ 3 billion deal with Beijing insisting that the agreement, a win-win situation for both the countries, does not "harm" the interests of any third party.
The deal, which revived a 1997 contract that allowed China exploration rights to the Al-Ahdab oil field, was signed during a low-profile visit to Beijing on Wednesday by Iraqi Oil Minister Hussain al-Shahristani.
With this, the state-owned China National Petroleum Corp (CNPC) has become the first foreign firm to enter such an agreement since the collapse of Saddam Hussein's regime. The deal is expected to allow oil-hungry China, growing at double-digit for decades, to meet its growing energy needs and diversify the sources of hydrocarbons.
"The cooperation between the relevant oil companies from China and Iraq is mutually beneficial," Chinese Foreign Ministry spokesman Qin Gang said.
"It will be conducive to the economic development of Iraq, will meet China's demands in the oil field as well, and is also conducted according to market rules and will not harm any interests of any third parties," he said.
After China won the rights to the al-Ahdab field in a deal then valued at $ 700 million, exploration activities were suspended due to UN sanctions and security issues following the US-led war in 2003 that toppled Saddam Hussein.
The revived deal would be worth $ 3 billion and the anticipated output from the oil field is expected to be 110,000 barrels per day from the initially planned 90,000 barrels per day.
The contract is to run for 20 years after production begins three years from now, a statement from the Iraqi embassy said.
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