China reaps the most from the Iraq oil boom: Report

Since the American-led invasion of 2003, Iraq has become one of the world's top oil producers, and the energy-hungry China is now its biggest customer and is eyeing an even larger share, a media report today said.
China already buys nearly half the oil that Iraq produces, nearly 1.5 million barrels a day, and is angling for an even bigger share, bidding for a stake now owned by Exxon Mobil in one of Iraq's largest oil fields.
"The Chinese are the biggest beneficiary of this post-Saddam oil boom in Iraq," Denise Natali, a Middle East expert at the National Defence University in Washington said.

"They need energy, and they want to get into the market," he was quoted as saying by the New York Times.
Before the invasion, Iraq's oil industry was hit by international sanctions against the government of Saddam Hussain. But however, with the regime change, the oil industry in Iraq has got a major boost.
"Chinese state-owned companies seized the opportunity, pouring more than USD 2 billion a year and hundreds of workers into Iraq, and just as important, showing a willingness to play by the new Iraqi government's rules and to accept lower profits to win contracts," the NYT said.

"We lost out," said Michael Makovsky, a former Defence Department official in the Bush administration who worked on Iraq oil policy.

"The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply," the daily quoted him as saying.
It said that in the desert near the Iranian border, China recently built its own airport to ferry workers to Iraq's southern oil fields, and there are plans to begin direct flights from Beijing and Shanghai to Baghdad soon.
"In fancy hotels in the port city of Basra, Chinese executives impress their hosts not just by speaking Arabic, but Iraqi-accented Arabic.

"Notably, what the Chinese are not doing is complaining. Unlike the executives of Western oil giants like Exxon Mobil, the Chinese happily accept the strict terms of Iraq's oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants," the report said.
It added that Chinese companies do not have to answer to shareholders, pay dividends or even generate profits.
"They are tools of Beijing's foreign policy of securing a supply of energy for its increasingly prosperous and energy hungry population," NYT said.
"We don't have any problems with them," said Abdul Mahdi al-Meedi, an Iraqi Oil Ministry official who handles contracts with foreign oil companies. "They are very cooperative. There's a big difference, the Chinese companies are state companies, while Exxon or BP or Shell are different".