Brittany Sturdivant
September 3, 2008
12:03AM
On Tuesday Iraq cleared a plan with China Petroleum National Corp allowing China access to the world’s third largest oil reserve. Iraq’s cabinet has finally approved the three billion dollar deal with China. China will charge a service fee of $6 a barrel, but will eventually drop to $3 a barrel. The Chinese company is expected to produce 25,000 barrels of oil a day. This deal with Iraq will benefit China extremely especially since the previous agreement with Iraq was suspended. The original agreement in 1997 was an oil production sharing agreement and the new deal is simply a service deal. China’s demand for oil is extremely important for the nation especially since China’s population is growing tremendously. Iraq will also benefit from the deal with China because people in Iraq will have an opportunity to be employed to help China Petroleum. Iraq is expected to gross $55billion in this 20 year oil deal with China.
I think China’s deal with Iraq is extremely important for China because their population and economy is growing rapidly. I think the deal with Iraq will be a huge success for both countries. I’m surprised that the only revenue that Iraq will receive from China is the service fees. Iraq’s view is that their oil shouldn’t be shared with anyone so that’s why they will pay service fees. I would think they would try to get more money out of China, but since the service fee is $6 a barrel and China is expected to produce 25,000 barrels a day then I think Iraq will be ok.
http://news.yahoo.com/s/afp/20080902/wl_mideast_afp/iraqchinaoil_080902151856
2 comments:
I definitely agree with you. I do not know your views but having our military over there and reading that article is scary. I love our troops and I definitely want them to be safe. Things are getting so expense but all because of fuel. I have the topic global economy and it is truly scary reading every week about how the economy globally is going down with accordance to inflation.
I feel like that they may have made this deal because China's industry is growing and Iraq knows that they will follow through with their side. I also don't understand why they have not tried to get more money knowing that China could give it to them if they wanted it.
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