CNPC obtains Iraqi largest oilfield

Iraq opened six giant oil fields and two natural gas fields for international bidding yesterday as the nation tries to boost production; it's the first time in almost three decades.

China National Petroleum Corp (CNPC) and BP formed a joint bidding panel and won the operation rights for Rumaila, the largest oil field in Iraq and would raise the daily crude output from the current 1.1 million barrels to 2.8 million.

Shortly before the bidding, Iraqi Government put forward a 'soft loan' requirement, demanding the winning company accept US$2.6 billion from Iraq and repay the fund with the earnings from the oilfields.

The joint winning body demanded a US$3.99 service fare for each barrel produced, which was reduced to US$2 by the Iraqi Oil Ministry, according to Dow Jones News Service.

Rumaila, the largest oil field in Iraq, has been in operation since 1972. It holds reserves of 17.7 billion barrels of crude. Rumaila lies in the border province Diyala, a place considered to be one of the most rebellious places on Earth.

Iraq's unilateral terms and energy firms' excessive concern about the local turbulent situation cast a dark cloud over the potential profit; Rumaila was the only field contracted by the companies.

Besides CNPC who obtained Rumaila, other major Chinese oil firms including Sinopec and SNOOC also participated in the bidding. As for the rest of the energy projects up for bid: Zubair, Qurna West, Maysan, Kirkuk, and Bay Hassan oilfields, they were unable to agree upon a price and are up for the highest bidder.