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VOA: CNPC Determined to Drill in Iraq

Voice of America (VOA) recently reported that China National Petroleum Corporation (CNPC) and its partners made a successful bid for part of the development work in the Halfaya Oil Field in southeast Iraq. Halfaya has a proven reserve of 4.1 billion barrels, with a current daily output of 3,100 barrels. The CNPC-led group won the bid for the 20-year development rights of Halfaya last year. The plan is to increase the daily production to 70,000 barrels by the end of this year. David Fridley from the U.S. Lawrence Berkeley National Laboratory suggested that the goal will be hard to achieve. Even if the goal is realized, the return on investment per barrel is only US$1.4. Many international oil companies gave up on the original bid due to the extremely low profit. The belief is that, even given the low profitability, China was still determined to drill in Halfaya just to secure an international source of oil. Half of China’s oil is imported. CNPC holds 37.5% of Halfaya shares.

Source: Voice of America, May 10, 2011