Chinese Win Iraqi Project
A Chinese consortium had bid $21.40/barrel to rehabilitate and manage a small oilfield in Iraq, near the Iranian border. Due to location, the Iraqi government did not want a Western company to participate. When Iraq told the Chinese bidders that they would not pay more than $2.40/barrel, the consortium hit the offer. Conclusion – Chinese interests in crude remain highly strategic and, quite possibly, relatively price insensitive, especially around current levels. BP appears to have beaten a Chinese bid for Devon’s Brazilian exploration blocks, possibly a signal that they overpaid.