China’s Ambitions in the Iraqi Oil Fields

Very interesting article published by Business Week’s analysts 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.
[…] 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).

Now, the main issue here is that one of the deepest strategic goals of the entire Iraqi Freedom operation was to lay the basis for a reshaping of the Middle East that would give the West a decisive advantage in two, inter-related fields. Such a project was first labeled “Greater Middle East” and then “New Middle East”.
(a) The first was the political-cultural one, with the end of nationalist Arab regimes like the Baathist Iraqi one and the introduction of pluralist democracies which would enhance the role of pro-Western actors, preventing Islamist terror networks from establishing bases in the Arabian Peninsula.
(b) The second was the geopolitical-strategic one, as the U.S.-led West would prevent Russia and China from becoming more influential, or even hegemonic (in the medium-to-long term) in the complex geo-economics of the Middle East. Such a desired outcome was of even greater importance as it would define power relations in the long term.
China’s deep involvement in the Iraqi oil game — even if in cooperation with BP for the moment — would mean a strategic failure for America, even though Washington will never admit it (since the emphasis has always been put on the anti-terrorist, political side of the Iraqi war). In spite of giving the U.S. and its allies a sort of definitive, strategic advantage over other players in the Middle East, the outcome of the Iraqi war will likely be the increased dynamism of economic competition in the Gulf area. However, as China, and possibly Russia, will reshape the Middle Eastern oil game, they will share with Americans and Europeans the interest of reducing geopolitical and political risk in Iraq.