China’s independent oil companies are gaining significant ground in Iraq, investing billions of dollars in OPEC’s second-largest oil producer, even as global energy majors scale back operations. The push marks a notable shift in Iraq’s oil landscape, traditionally dominated by state-run Chinese giants and Western firms.
According to executives at four companies, smaller Chinese producers aim to double their output in Iraq to 500,000 barrels per day (bpd) by 2030 — a figure not previously reported. These firms, including Geo-Jade Petroleum, United Energy Group, Zhongman Petroleum, and Anton Oilfield Services, now account for half of the licenses awarded in Iraq’s 2023 exploration round.
Drawn by Iraq’s new profit-sharing contract model — a departure from rigid fixed-fee deals — the Chinese independents are offering competitive financing, swift project delivery, and high risk tolerance. Iraqi officials say the change is part of Baghdad’s strategy to accelerate oil production and meet its goal of increasing output to over 6 million bpd by 2029.
“These companies are known for rapid execution, operating in challenging environments, and delivering on tight schedules,” said Ali Abdulameer of state-run Basra Oil Co. “Compared to Western firms, dealing with the Chinese is much easier and more efficient.”
The independents bring cost advantages too. Executives estimate the cost of drilling a development well has dropped by half in the past decade to $4–5 million. Geo-Jade Petroleum CEO Dai Xiaoping noted their management costs are significantly lower than those of Western and state-run Chinese firms.
Geo-Jade is leading a $848 million investment in the South Basra project, aiming to restore the Tuba field to 40,000 bpd by 2027 and eventually ramp it up to 100,000 bpd. The ambitious project includes a 200,000-bpd refinery, two power stations, and a petrochemical complex.
Zhongman Petroleum, meanwhile, has pledged $481 million for blocks in the Middle Euphrates and East Baghdad North regions. Zhenhua Oil, a smaller state-backed firm, targets doubling its output at the Ahdab field to 250,000 bpd by 2030.
However, the expansion comes with trade-offs. Critics, including former Basra Oil official Muwafaq Abbas, warn of inadequate transparency and a reliance on Chinese staff over local workers. There are also concerns that the cheaper projects may not meet Iraq’s aspirations for advanced oilfield technology.
Despite the influx of Chinese independents, Western firms are not entirely out of the picture. France’s TotalEnergies launched a $27 billion project in 2023, while BP is expected to invest up to $25 billion to redevelop Iraq’s Kirkuk oilfields.
As Iraq balances its need for rapid development with long-term technological advancement, the rise of China’s independent oil firms signals a reshaping of the global energy order in one of the world’s most strategic petroleum hubs.
Written By Rodney Mbua
