Shafaq News/Iraq is actively pursuing foreign investments to reduce its notorious gasflaring and enhance production, a top energy official said.
Hamid YounisAl-Zobaie, Iraq’s Deputy Minister of Oil, described the country as "one ofthe worst offenders" in gas flaring during a forum at the Atlantic Councilin Washington, “Iraq, despite being the second-largest oil producer in OPEC, isone of the worst violators when it comes to gas flaring, a toxic and wastefulpractice that releases usable gas into the atmosphere,” he said, according toS&P Global Commodity.
Al-Zobaiehighlighted that Iraq is committed to attracting foreign companies,particularly from the US and Europe, to invest in its energy sector. "TheMinistry of Oil is working to encourage foreign firms to operate in Iraq, andthe current government is focused on investment and cooperation with globalcompanies," he added.
With a goalof achieving self-sufficiency in gas within five years, Iraq has ramped upefforts to draw in international investments. The United States has encouragedits companies to enter the Iraqi energy market, with high-level Iraqidelegations visiting the US twice this year, resulting in several new deals.
Al-Zobaieconfirmed that US and European firms have been authorized to collaborate withIraq, and the US government is formulating plans to cooperate with local Iraqicompanies.
Iraq’s drivefor foreign investments is also seen as part of broader US efforts to countergrowing Chinese influence in Iraq's energy sector and reduce Baghdad's relianceon electricity imports from Iran. Iraq suffers from chronic power outages andis heavily dependent on Iranian electricity imports, while the US is pushing todevelop gas projects to lessen this dependence. However, concerns over securityand corruption have made U.S. firms hesitant to invest.
As majorWestern oil companies retreat from Iraq’s energy sector, the country hasincreasingly turned to China. In 2023, Chinese firm PetroChina took overoperations at the West Qurna 1 oil field after ExxonMobil exited, selling its22.7% stake to Iraq’s state-owned Basra Oil Company.
A World Bankreport in June 2023 noted that Iraq increased oil production that year butmanaged to reduce gas flaring by only 1%. Seven deals were signed with U.S. companiesin April to tackle associated gas and flaring, marking progress in curbing thepractice.
China'sdominance in Iraq's oil sector has grown as Western firms have scaled back. InIraq’s latest licensing round in May, Chinese companies won 10 out of 13 oiland gas projects. Smaller Chinese firms also participated, further solidifyingChina’s foothold in Iraq’s energy sector. China, already the largest buyer ofIraqi crude, imported 33.42% of Iraq's crude oil in the first nine months of2024.
John Calabrese,an associate professor, noted that Chinese companies have long beenenthusiastic participants in Iraq’s oil sector, while Western firms have beenmore hesitant. "Chinese companies have established a lasting presence overa long period, giving them a competitive advantage," Calabrese said.