China refiner may be blacklisted in Iraq

Scott Tong Aug 25, 2009
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China refiner may be blacklisted in Iraq

Scott Tong Aug 25, 2009
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Steve Chiotakis: China’s been busy making acquisitions, especially in oil and gas. This year alone, Chinese state-owned companies have inked multi-billion dollars deals in Russia, Angola and Brazil. But one deal in Iraq has landed corporate China in some political hot water. From Shanghai, Marketplace’s Scott Tong reports.


SCOTT TONG China’s biggest refiner, Sinopec, may be blacklisted from future projects in Iraq. So says a top Iraqi official, quoted by Reuters. That’s cause Sinopec may buy a Swiss oil-drilling firm that has a deal with the Kurds in northern Iraq. The Kurds and Baghdad don’t see eye-to-eye on oil revenue. Sinopec, welcome to the neighborhood, says David Hewitt of brokerage CLSA.

David Hewitt: The blacklist comment that we’re talking about today is probably one many signposts that signal the difficulty of work in that area.

Still, China is hugely interested in Mideast oil. It imports half its oil, so it needs energy security. Global assets are now cheap, and Beijing has cash. Sinopec did not comment today. And even if it were blacklisted, Hewitt figures China can deal with it.

Hewitt: If Sinopec were barred from future bids in Iraq then you still have two other state owned entities that are Chinese that can continue to bid in Iraq.

Meantime, corporate China’s still shopping elsewhere. Word is, the next big oil deal could come in Argentina.

In Shanghai I’m Scott Tong for Marketplace.

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