State-run Chinese Petroleum Corp (CPC, 中油) said yesterday it would carefully evaluate whether to invest in Iraqi oil exploration and refining now that the US government has lifted economic sanctions against the oil-rich country.
In the past, Iraq was not among Chinese Petroleum's preferred crude oil supply sources because of its unstable political situation, said Chinese Petroleum president Chen Bao-lang (
The company has never signed any long-term procurement contracts with nor has it ever invested in Iraq, Chen said.
Iraq is rich in petroleum reserves, possessing 10 percent of the world's known oil deposits, second only to Saudi Arabia's 25 percent. Iraq is not a major player in global energy markets, although its petroleum reserves are high-quality light crude oil.
Asked whether Chinese Petroleum would invest in Iraq now that the administration of US President George W. Bush has lifted economic sanctions against that country, Chen said the company must make a careful evaluation before making a decision on the issue.
"We have consistently conducted prudent assessments before launching any overseas investment projects. We must make good use of our money. We would invest in Iraq only if we can find a potentially profitable oilfield," Chen said.
Still, Chinese Petroleum will proceed with a project to jointly explore for oil and gas in the Tainan Basin with China National Offshore Oil Corp (CNOOC,
Both Chinese Petroleum and China National said in January of last year that they won government approval to spend US$25 million exploring in the 15,400km2 basin, with proceeds split equally between the two.
Touching on the recent oil price spike, which shot last week to the historic heights of October 1990, Chen said Chinese Petroleum will not raise its gasoline prices in the short term with a view to maintaining domestic consumer price stability.
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