War on Iraq

Gunmen Attack Chinese Oil Installations In Southern Iraq

Though representing a modest fraction of Iraq's oil riches, the Ahdab field was marketed as proof that security conditions have improved.

Unidentified gunmen have destroyed a power station feeding the Ahdab oil field which a Chinese firm is developing.

The attack is the first on Ahdad for the development of which the China National Petroleum Corporation had signed a $3 billion contract with Iraq in 2008.

The Chinese had only started operations in earnest last month and the attack is a blow to their plans to develop the field situated in the border Province of Wasit southeast of Baghdad.

Iraqis provide security for the Chinese workers and their equipment and the Chinese are also reported to have brought with them their own security team.

A provincial official, refusing to be named said: “Installations belonging to an important oil field have been subjected to a terrorist attack from unidentified gunmen.

“The attackers targeted the electricity system linked to the field as well as the lines carrying power. The damage is estimated at more than $1 million,” the source added.

He said the authorities believe the attack is a warning for the Chinese to leave.

China was the first foreign country to have won such a lucrative foothold in the country, seen as one of the riches in oil reserves in the world.

Although representing only a modest fraction of Iraq’s oil riches, the Ahdab field was marketed as proof that security conditions have improved and foreign workers in the country would be safe.

There has been no reaction from the Chinese side but their withdrawal would squash Iraqi dreams of boosting oil production to 4.5 million barrels a day from the current 2.5 million.

The attackers, analysts say, are probably sending “a warning signal” to the Chinese for more attacks if they stay put.

Iraq hopes the development of Ahdab will add at least 900,000 barrels a day to its output.