Identifier
Created
Classification
Origin
08BEIJING3733
2008-09-26 01:22:00
CONFIDENTIAL
Embassy Beijing
Cable title:
CHINA'S CNPC MANAGER COMMENTS ON OIL SERVICE
how-toVZCZCXRO1963 OO RUEHCN RUEHGH RUEHVC DE RUEHBJ #3733 2700122 ZNY CCCCC ZZH O 260122Z SEP 08 FM AMEMBASSY BEIJING TO RUEKJCS/SECDEF WASHDC IMMEDIATE RUEHC/SECSTATE WASHDC IMMEDIATE 0141 INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE RUEHGB/AMEMBASSY BAGHDAD IMMEDIATE 0198
C O N F I D E N T I A L BEIJING 003733
SENSITIVE
SIPDIS
STATE FOR EAP/CN JHABJAN
STATE FOR EEB/ESC/IEC/ENR JKOPP
STATE FOR INR/EC
STATE FOR INR/EAP
STATE FOR INR/NESA
STATE FOR NEA/I
DEPT OF TREASURY WASHINGTON DC
DEPT OF COMMERCE WASHDC
DEPT OF ENERGY WASHINGTON DC
CIA WASHINGTON DC
NSC WASHDC
E.O. 12958: DECL: 09/25/2023
TAGS: ECON EFIN ENIV ENRG IZ CN
SUBJECT: CHINA'S CNPC MANAGER COMMENTS ON OIL SERVICE
CONTRACT WITH IRAQ
REF: BEIJING 03575
Classified By: Minister-Counselor Robert Luke for Reasons 1.4 (b) and (
d)
C O N F I D E N T I A L BEIJING 003733
SENSITIVE
SIPDIS
STATE FOR EAP/CN JHABJAN
STATE FOR EEB/ESC/IEC/ENR JKOPP
STATE FOR INR/EC
STATE FOR INR/EAP
STATE FOR INR/NESA
STATE FOR NEA/I
DEPT OF TREASURY WASHINGTON DC
DEPT OF COMMERCE WASHDC
DEPT OF ENERGY WASHINGTON DC
CIA WASHINGTON DC
NSC WASHDC
E.O. 12958: DECL: 09/25/2023
TAGS: ECON EFIN ENIV ENRG IZ CN
SUBJECT: CHINA'S CNPC MANAGER COMMENTS ON OIL SERVICE
CONTRACT WITH IRAQ
REF: BEIJING 03575
Classified By: Minister-Counselor Robert Luke for Reasons 1.4 (b) and (
d)
1) Econoff met with China National Oil and Gas Exploration
and Development Corporation senior Vice-President Wang Shali
on September 25 to discuss CNPC's oil service contract with
Iraq (REFTEL). Wang said that the Iraqi side pressed the
China National Petroleum Company (CNPC) to sign a service,
vice a production sharing, agreement, claiming that a
petroleum law currently under discussion and the Iraqi
constitution limited Iraq's ability to sign production
sharing agreements. To encourage CNPC to agree to an oil
service contract, Iraqi officials also emphasized that the Al
Ahdab field had already been discovered and thus there was
less risk involved in developing it. CNPC,s decision to sign
the service contract was influenced by their assessment that
Iraq,s security situation was improving and that the Iraqi
government would help protect investors.
2) Wang said CNPC's motives for signing the agreement
included increasing access to crude oil. According to the
terms of the agreement, China would initially only get fees
from Iraq, but China could use the money to buy the oil and
transport it back to China or sell it on the international
market. The agreement was also an opportunity for CNPC to
build a relationship with the Iraqi government and
demonstrate China's long-term commitment to the country.
According to Wang, Iraq would be opening five or more
oilfields to competitive bidding in October and CNPC planned
to participate in the bidding.
3) The China National Oil and Gas Exploration and Development
Corporation is a division of CNPC.
RANDT
SENSITIVE
SIPDIS
STATE FOR EAP/CN JHABJAN
STATE FOR EEB/ESC/IEC/ENR JKOPP
STATE FOR INR/EC
STATE FOR INR/EAP
STATE FOR INR/NESA
STATE FOR NEA/I
DEPT OF TREASURY WASHINGTON DC
DEPT OF COMMERCE WASHDC
DEPT OF ENERGY WASHINGTON DC
CIA WASHINGTON DC
NSC WASHDC
E.O. 12958: DECL: 09/25/2023
TAGS: ECON EFIN ENIV ENRG IZ CN
SUBJECT: CHINA'S CNPC MANAGER COMMENTS ON OIL SERVICE
CONTRACT WITH IRAQ
REF: BEIJING 03575
Classified By: Minister-Counselor Robert Luke for Reasons 1.4 (b) and (
d)
1) Econoff met with China National Oil and Gas Exploration
and Development Corporation senior Vice-President Wang Shali
on September 25 to discuss CNPC's oil service contract with
Iraq (REFTEL). Wang said that the Iraqi side pressed the
China National Petroleum Company (CNPC) to sign a service,
vice a production sharing, agreement, claiming that a
petroleum law currently under discussion and the Iraqi
constitution limited Iraq's ability to sign production
sharing agreements. To encourage CNPC to agree to an oil
service contract, Iraqi officials also emphasized that the Al
Ahdab field had already been discovered and thus there was
less risk involved in developing it. CNPC,s decision to sign
the service contract was influenced by their assessment that
Iraq,s security situation was improving and that the Iraqi
government would help protect investors.
2) Wang said CNPC's motives for signing the agreement
included increasing access to crude oil. According to the
terms of the agreement, China would initially only get fees
from Iraq, but China could use the money to buy the oil and
transport it back to China or sell it on the international
market. The agreement was also an opportunity for CNPC to
build a relationship with the Iraqi government and
demonstrate China's long-term commitment to the country.
According to Wang, Iraq would be opening five or more
oilfields to competitive bidding in October and CNPC planned
to participate in the bidding.
3) The China National Oil and Gas Exploration and Development
Corporation is a division of CNPC.
RANDT