The acquisition of more than 60% of the Eridu field distances the West from this new discovery, which is estimated to contain between 7 and 10 billion barrels of oil

Russia takes Iraq's biggest oil find in 20 years

AFP/KENZO TRIBOUILLARD - Tanque de almacenamiento de combustible de la petrolera rusa Lukoil
AFP/KENZO TRIBOUILLARD - Réservoir de carburant de la compagnie pétrolière russe Lukoil

In line with China's strategy of economically supporting states with seemingly unlimited energy resources, Russia has allied with the Asian giant to provide Iraq with infrastructure in exchange for the acquisition of crude oil at very low cost. At the same time, this manoeuvre by the Moscow-Beijing axis significantly distances the West's power over the resources of the region comprising Iraq, Kurdistan, Syria and, ultimately, Iran.

The Eridu field, located some 120 kilometres to the west and close to the main oil export route from Basra to the important Nasiriyah oil fields, is the largest Iraqi find in the last 20 years. The result of this discovery is part of the research, exploration and development of Field 10. 

By taking control of the Eridu oil field, Russia and China hope to hasten the end of Western hegemony in the region and consolidate their positions as major players in the global energy market. 

AFP/AHMAD AL-RUBAYE - Policías iraquíes hacen guardia en el campo petrolífero de Halfaya, perteneciente a la empresa PetroChina, en el distrito de al-Kahla, en la ciudad de Amara, al sur de Bagdad, el 26 de julio de 2022
AFP/AHMAD AL-RUBAYE - Iraqi policemen stand guard at the Halfaya oil field belonging to PetroChina in the al-Kahla district of the city of Amara, south of Baghdad, on July 26, 2022

To achieve this goal, Russia's Lukoil is prepared to take full control of the oil region. This comes after Japan's Inpex decided to sell its 40% stake in Block 10, paving the way for Lukoil's dominance. In addition, Iraq's national oil company, Dhi Qar Oil Company, has officially approved the development of reserves in Field 10, including the Eridu oil field. 

Russia also plans to acquire the huge Akkaz gas field, which is located on Iraq's western border with Syria. Its strategic location will help the country enter "the heart of the Shi'ite Crescent", both from an economic and security point of view, controlling the land routes connecting Iran, Iraq and Syria, which will become a gateway for Iranian oil to Europe. 

REUTERS/ESSAM AL-SUDANI - Campo petrolífero de Nahr Bin Umar, al norte de Basora, Irak
REUTERS/ESSAM AL-SUDANI - Nahr bin Umar oil field, north of Basra, Iraq

The Field 10 contract signed by Lukoil and Inpex in 2012 guarantees a relatively high compensation rate of $5.99 per barrel. Peak production in 2027 was initially expected to be at least 250,000 barrels per day (bpd), but Russian oil industry sources estimate that the figure could be much higher, exceeding 350,000 barrels per day (bpd). 

This strategic move by Russia and China not only impacts the Iraqi oil industry, but also demonstrates their broader ambitions in the region. Russia's efforts to distance itself from the US are evident in its control of Kurdish oil and gas in the semi-autonomous region of Iraq. 

AFP/MOHAMMED SAWAF - Refinería de petróleo en la ciudad central iraquí de Karbala el día de su inauguración el 20 de octubre de 2022
AFP/MOHAMMED SAWAF - Oil refinery in the central Iraqi city of Karbala on the day of its inauguration on 20 October 2022

The success of this strategy in the Kurdistan region gave Russia the confidence to further oppose US intervention in the Middle East. The takeover of Iraq's largest oil discovery in two decades marks a significant shift in the power dynamics of global energy markets. In the Middle East, Western influence is waning as a new alliance led by Russia and China takes shape.

At an Iraqi Ministerial Conference, it was agreed that Iraq will fully support the implementation of all aspects of the 'Iraq-China Framework Agreement' by December 2021. The scope of this agreement is similar to the 'Comprehensive Cooperation Agreement', signed in 2019. A key part of both agreements is to grant China the right of first refusal on all proposed oil, gas and petrochemical projects in Iraq for the duration of the agreement and at least 30% of concession rights for all energy sources.

AFP/SABAH ARAR - Ali Maarij (R), director de Contratos y Licencias del Ministerio de Petróleo iraquí, se da la mano tras la firma de la licencia para el campo de gas de Mansouriya, en la gobernación de Diyala, con la empresa china Sino-Pec. en Bagdad el 20 de enero de 2022
AFP/SABAH ARAR - Ali Maarij (R), director of Contracts and Licensing at the Iraqi Oil Ministry, shakes hands after signing the licence for the Mansouriya gas field in Diyala governorate with Chinese company Sino-Pec. in Baghdad on January 20, 2022

In return, Beijing will be in charge of the development and construction of factories and supporting infrastructure throughout the country. These include railways and other logistical and transport links operated by staff of Chinese companies based in Iraq, which are critical to the development of the Silk Road and Belt and Road.  

Consistent with Russia and China's aims to keep the West out of Iraq's energy deals is the goal of bringing Baghdad closer to new Iranian-Saudi interests. That is why China will support development to complete Iraq's rail infrastructure and electrify the 900-kilometre rail network linking Tehran and the Iraqi city of Mashhad. 

AFP/OFICINA DE PRENSA DE LOS PRIMEROS MINISTROS IRAQUÍES - El jefe de gabinete del Primer Ministro, Ihsan al-Awadi (R), y al embajador de Irán en Bagdad, Mohammad Kazem al-Sadeq, dándose la mano mientras intercambian firmó acuerdos bilaterales durante una ceremonia en Bagdad el 11 de julio de 2023
AFP/OFICINA DE PRENSA DE LOS PRIMEROS MINISTROS IRAQUÍES - The Prime Minister's Chief of Staff Ihsan al-Awadi (R) and Iran's Ambassador to Baghdad Mohammad Kazem al-Sadeq shake hands as they exchange signed bilateral agreements during a ceremony in Baghdad on July 11, 2023

Plans also include the construction of a high-speed line between Tehran, Qom and Isfahan and the extension of this route northwest through Tabriz, linking many major oil, gas and petrochemical complexes, with the Tabriz-Ankara pipeline starting point being the new beginning of the 2,300 kilometres long, connecting Urumqi (the capital of Xinjiang) with Tehran and reaching Europe via Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Turkey.