Chinese Independent Oil Firms Expand Rapidly in Iraq Amid Global Retreat
SINGAPORE/BAGHDAD (Reuters) – As some global oil giants reduce their footprint in Iraq, independent Chinese energy companies are stepping up their investments, committing billions of dollars to the OPEC member nation. These smaller, mostly private firms are taking advantage of more favorable contract terms, aiming to double their output in Iraq to 500,000 barrels per day by 2030, according to company insiders — a figure not previously disclosed.
While Iraq has long sought to attract major international oil players, it is now seeing a shift as nimble Chinese independents increase their presence. Iraqi officials acknowledge this growing role, especially as pressure mounts to accelerate oil projects. Previously, the government had resisted increasing Chinese influence in its oilfields.
For these independent firms — often run by former executives of China’s state energy giants — Iraq presents an opportunity to execute faster and cheaper projects that may be overlooked by larger corporations. With limited room for growth in China’s domestic energy market, these companies are following a broader trend of Chinese industrial players seeking global opportunities.
Lesser-known firms like Geo-Jade Petroleum, United Energy Group, Zhongman Petroleum and Anton Oilfield Services gained attention last year after securing half of the licenses in Iraq’s oil exploration rounds.
Executives say Iraq’s improved political stability and openness to both Chinese and Western investments make it a more attractive destination. The country aims to increase production by over 50% to surpass 6 million barrels per day by 2029. China’s state-owned CNPC already accounts for more than half of Iraq’s current oil output through key fields like Haifaya, Rumaila, and West Qurna 1.
Shift to Profit-Sharing Spurs Chinese Expansion
Iraq’s move from fixed-fee to profit-sharing contracts in 2023—following the pullback of ExxonMobil and Shell—has helped lure more agile, risk-tolerant Chinese independents. These firms offer flexible financing, cost-saving labor and equipment, and are willing to accept lower profit margins for long-term contracts, according to Ali Abdulameer of Basra Oil Co.
“They execute projects quickly, stick to deadlines, and are comfortable operating in risky environments,” he said. “Compared to Western companies, working with the Chinese is more straightforward.”
Chinese executives report that their firms can complete oilfield developments in two to three years, compared to the five to ten years often required by Western companies. Geo-Jade CEO Dai Xiaoping noted that their operating costs are significantly lower, giving them an edge over both Western competitors and Chinese state-owned giants.
Dai added that independent Chinese firms have helped slash the cost of drilling development wells in Iraq from around $10 million to $4–5 million over the past decade.
Major Investments and Trade-Offs
Geo-Jade recently agreed to invest in Iraq’s South Basra project, including a plan to boost production at the Tuba field to 100,000 bpd and build a 200,000 bpd refinery. With an $848 million commitment, Geo-Jade aims to restart the long-idle Tuba field and produce 40,000 bpd by mid-2027. The broader project will also include a petrochemical plant and two power stations, requiring several billion dollars more in investment.
Meanwhile, Zhenhua Oil — a smaller state-run firm — plans to double its output at the Ahdab field to.
