Chinese company China Huanqiu Contracting & Engineering Co. (HQC) has secured a contract to provide project management services for Iraq's West Qurna 1 (WQ-1) oilfield.

Situated 50 km northwest of Basra in southern Iraq, West Qurna-1 is one of the world’s largest oilfields, boasting recoverable reserves of around 22bn barrels, though HQC's announcement on Chinese social media network WeChat said WQ-1 has proven reserves exceeding 12bn barrels.

HQC said that its deal covers the full lifecycle of the project, including planning, design, procurement and construction, necessitating significant technical and operational expertise. “The agreement is HQC’s largest overseas services contract since 2020 and highlights its growing presence in Iraq’s energy sector,” it said.

In January last year, state-owned PetroChina, the overseas arm of China National Petroleum Co. (CNPC), succeeded ExxonMobil as the lead contractor for WQ-1, and holds the largest stake in the project. Under PetroChina’s stewardship, production at West Qurna-1 has averaged 541,000 barrels per day, peaking in July at 568,000 bpd.

At that time, Bassem Al-Ghalabi, deputy general manager of Basra Oil Co. (BOC), expressed confidence in PetroChina's ability to elevate daily production. “With PetroChina’s support, we have seen marked progress in both oilfield output and community welfare. The company has made significant enhancements to local services and infrastructure. We are confident of reaching daily production targets of 800,000 barrels, and eventually 1.2mn barrels,” he said.

The developers of WQ-1 are paid a maximum of just $1.9 per barrel of oil produced from the asset – less than $1.2 per barrel after deduction of taxes – under a 20-year technical services contract (TSC) signed in 2010. It is worth noting that the WQ-1 TSC also does not cover gas production, with China Petroleum Engineering & Construction Corp. (CPECC) having been awarded a $121mn deal in late 2019 to upgrade facilities and increase the capture of flare gas at the field.