Feral Jundi

   China’s demand for oil jumped by an “astonishing” 28% in January compared with the same month a year earlier, the International Energy Agency (IEA) says. 

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   Here is a quick run down on what China is doing in Iraq, and it is all about oil.  I find it interesting that China is getting more involved with really risky resource ventures in places like Iraq or the Congo. And what that means to this industry, is that the Chinese will find a way to secure these ventures and investments.  You will either see Chinese security folks, or they will use local nationals for the work.  But like with most security work, they tend to go with the kind of security they can really trust and depend upon for the most sensitive projects.  Especially to guard oil executives.

   The other thing about this that is frustrating, is that information about Chinese private security companies is very thin.  Maybe there is tons of stuff on Chinese servers?.  Who knows, but it is an area that I would like to learn more about as the fight for resources increases in the coming future. Our industry will only see more involvement in that resource war, and it is important to track this stuff.

   In Iraq, you could very well see a situation where you see Chinese security contractors rolling down the highway in SUVs, or posted at some gate of some oil facility. If any readers have any stories about bumping into Chinese military or contractors in Iraq, please feel free to post away in the comments.  Like I said, there is nothing written about Chinese PMC’s or PSC’s, and I would like to see Feral Jundi’s archives fill up with some more data about that.  I will keep looking, and if anyone finds anything else, let me know. Especially for Africa, because China is really involved there. –Matt

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Chinese guards at the Ahdab field Thaier Al-Sudan/Reuters 

Red Star Over Iraq

January 21, 2010

China’s ambitions in the Iraqi oil fields could change the landscape

By Stanley Reed and Dexter Roberts

It may be the start of the biggest oil job in the world. Each day, 20 workers from BP and China National Petroleum Corp. (CNPC) buckle down to the task of prepping the Rumaila oil field in southern Iraq for rapid development. In industry lingo, Rumaila is a “supergiant”—a 50-mile-long deposit of sweet crude with estimated reserves of 16 billion barrels, whose output may someday rank second only to Saudi Arabia’s vast Ghawar field. The Saudis, though, have carefully managed their oil assets for decades. In contrast, Rumaila, a lightly inhabited expanse of date groves and Bedouin encampments, has not had a proper upgrade since the 1970s. The Iraqis contracted with BP and CNPC last year (BP) to juice Rumaila’s production from 1.06 million barrels a day to 2.85 million, all in seven years. No one has ever tried such a ramp-up at a field as huge as this one. Putting Rumaila back in full working order will take tens of thousands of workers, 1,000 new wells, and billions in investment.

BP is the largest partner in the venture, but only by a dipstick: It has a 38% stake, while the Chinese hold 37% (the rest is owned by an Iraqi company). The media focus has been on BP’s decision to take up the Rumaila challenge for a low fee of only $2 for every barrel the venture produces. But the more important story could be China’s role. “CNPC’s involvement brings together the country with the most rapid growth in energy demand in history with the country that plans the greatest buildup of production capacity ever,” says Alex Munton, an Iraq specialist at Edinburgh-based oil consultants Wood Mackenzie.

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