New Opportunities For Valve Industry: China's Assistance For Iraq's 100000 Barrels Of Oil Per Day For Reconstruction

- Oct 17, 2019-

As we all know, Iraq is one of the most important oil exporting countries in the world. In 2018, China has replaced India as Iraqs largest trading partner with bilateral trade volume of more than 30 billion US dollars. Today, Iraq is also Chinas second largest oil supplier. In the process of reconstruction of the oil Kingdom, a large number of valves are necessary. This time, Chinas assistance to Iraqs reconstruction brings new opportunities for Chinese valve enterprises.

1. Development status of Iraq

We belong to Asia and we want to be part of the rise of Asia. This is what the Iraqi Prime Minister said in Beijing at the end of September when he visited China. It has been 16 years since the end of the war in Iraq, and this middle east country has never recovered. To a large extent, these difficulties are due to the collapse of Saddam Husseins regime and the chaos brought by the withdrawal of American troops after the intervention. In this context, Iraqi Prime Minister Abdul Mahdi visited China last month, hoping to expand cooperation with China. Soon, China extended a helping hand to reach an oil for reconstruction project with Iraq.

Iraq and China officially launched the oil for reconstruction project during Abdul Mehdis delegations visit to China, the Middle East media al monitor news network reported Thursday. According to the agreement, Chinese companies participate in Iraqs infrastructure reconstruction, while Iraq promises to provide 100000 barrels of oil to China every day.

After three years of war, Iraq needs $88 billion to repair and develop its infrastructure. We have an agreement [with China] to set up a mutual investment fund to invest with the money from oil, Mehdi said. Besides China, Iraq will cooperate with other countries and will not let China monopolize all projects.

stainless steel Check valve

No matter the reconstruction of peoples livelihood or industry, infrastructure construction is indispensable. All kinds of valves we produce: gate valve, ball valve, check valve, stop valve and butterfly valve have become one of the necessities.

2. Development status of Iraqs oil industry

There are 73 oil fields in Iraq, including 6 super large oil fields, 17 super large oil fields and 20 large oil fields. The representative oil fields are Rumaila oil field in the South and Kirkuk oil field in the north. At present, about 45% of the oil production comes from Rumaila and more than 20% from Kirkuk. Affected by the Iraq war and the domestic situation, the domestic oil and gas exploration achievements in Iraq are not abundant. In June 2006, Iraq obtained an oil discovery in the Zagros Mountains. The test daily production of its tawkel well is 5000 barrels of oil equivalent, and its proved reserves are about 100 million barrels. It is the largest oil discovery since 1993. In July 2007, another onshore gas discovery was obtained, which is also located in Zagros.

Before the 2003 Iraq war, Iraq produced an average of 2.6 million barrels of crude oil per day and 2.1 million barrels of crude oil per day. Due to the war and post-war damage, Iraqs crude oil production declined sharply, with an average daily crude oil output of only 1.344 million barrels, of which the daily export volume was less than 400000 barrels. In 2004, Irans crude oil production rebounded to 100 million tons, with an average daily output of 2 million barrels, and its daily export volume also rebounded to 1.45 million barrels. Affected by factors such as security turmoil, Iraqs crude oil production declined in 2005, with an average daily output of 1.833 million barrels. Crude oil exports were affected by this, among which the fourth quarter fell to a new low after the war, with an average daily export of 1.1 million barrels. In the following years, especially since 2007, Iraqs domestic investment of about 34 million US dollars began to play an important role in protecting the security system of oil production facilities, and promoted the continuous recovery of crude oil production and export. In the first quarter of 2008, Iraq produced 2.4 million barrels of crude oil per day and exported 1.92 million barrels. In the second quarter, the average daily crude oil production increased to 2.43 million barrels, the highest level since the Iraq War

The whole forged steel ball valve, forged steel gate valve, forged steel stop valve, forged steel check valve and high-pressure forged steel valve have been widely used in the petroleum industry for a long time. This reconstruction is bound to be a new opportunity for the valve industry.

Butterfly valve

3. Assistance

During the visit, Iraq and China signed eight agreements, the report said. Under the framework of cooperation signed by the Ministry of finance of Iraq and China Export Credit Insurance Corporation, these agreements involve many projects such as roads, railway network, housing, ports, hospitals, schools, dams, energy and transportation. Under the deal, China will invest $10 billion from the beginning to build infrastructure to transport oil from Iraq to China.

The infrastructure was built by Chinese companies, while Iraq promised 100000 barrels of oil a day to China. Chinas Hailong oil technology services and Iraqi drilling companies have teamed up to form a joint venture to drill oil across Iraq, including the Majnoon field, one of the worlds largest.

The agreement also includes cooperation with Iraqs electricity and manufacturing industries, as well as the establishment of a Chinese Library at Baghdad University.

The Ministry of electricity of Iraq has signed an agreement with China Heavy Machinery Group, which has been engaged in construction projects in Iraq, especially the construction of Saladin fuel power station.

Saleh Abdullah jubri, Minister of industry and mining of Iraq, said that one of the contents of the agreement is to establish a joint manufacturing city in Iraq and China to produce goods that meet world standards.

4. Opportunities and challenges of valve industry

As mentioned above, all projects in our country to assist Iraq: roads, railway networks, housing, ports, hospitals, schools, dams, energy and transportation, etc., are inseparable from the use of valves. In recent years, the development level of Chinas valve manufacturing industry has been constantly improving, and the domestic dependence on imported valves is becoming lower and lower. But at the same time, the whole forged steel ball valve, forged steel gate valve, forged steel stop valve, forged steel check valve, high-pressure forged steel valve, as well as the common gate valve, ball valve, check valve, stop valve, butterfly valve, regulating valve, etc. produced by most enterprises still have the situation of uneven manufacturing level and can not meet the standard. In the face of opportunities, we should further improve our R  D capability and manufacturing level, strive to let more domestic products go abroad, and add luster to the rejuvenation of our great nation.