Iraq’s first ever oil prepayment deal worth $2 bn with Chinese state company Zhenhua oil has been frozen. Speaking to the BBC, Oil Minister Ihsan Ismaael confirmed MEES reports from the previous week (MEES, 19 February).The minister attributed the decision to strong price gains in 2021, and such rises certainly made the deal more politically contentious ahead of this year’s parliamentary elections.
Relations between Zhenhua and Iraq are unlikely to suffer from the decision, as the state firm and its parent company Norinco are both seeking to expand commercial relations with Baghdad. But if Iraq develops a reputation as an unreliable partner this could deter other trading firms from entering into any future such arrangements. (CONTINUED - 115 WORDS)