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China to become major consumer of Iraqi oil

25th January 2013

To satisfy the country's energy demand, Chinese oil companies are looking both overseas and domestically

China to become main consumer of Iraqi oil
In late December, CNPC emerged as the frontrunner to take over Iraq’s West Qurna-1 oilfield from Exxon Mobil

China is poised to become a major consumer of Iraqi crude, China Daily reported on Thursday, as the world’s top energy consumer looks to other areas of the world to satisfy its increasingly energy needs.

"Good oil resources in other areas of the world have already been carved up by international oil giants, and there are not many choices left for Chinese companies," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

In late December, oil major China National Petroleum Corp (CNPC) emerged as the frontrunner to take over Iraq’s West Qurna-1 oilfield from Exxon Mobil, a move that would diminish Western oil influence in Iraq a decade after the U.S.-led invasion.

The US oil company is giving up its stake in the giant southern oilfield after clashing with the central government in Baghdad over exploration contracts it had signed with the autonomous Kurdistan region in the north.

China's oil output in the past year reached 207.5 million metric tonnes, up 1.9 per cent year-on-year, according to figures from the China Federation of Logistics and Purchasing.

The country’s oil production in December reached a record high of 17.94 million tonnes, a 5.6 per cent increase as the country’s economic growth started to rebound after slowing for seven quarters.

However, despite the pick up in production, the International Energy Agency’s (IEA) Oil Market Report for January cautioned that increased debt levels and economic uncertainties could lead to swings in Chinese demand, in both directions, throughout 2013.