Iraq’s state oil marketer SOMO is closing in on a deal with China’s state-run Zhenhua Oil for a joint venture to help boost Iraqi oil sales to China, the world’s top oil importer, Reuters reported.
“Zhenhua helped Iraq to penetrate the Chinese market and make more revenues for Iraq,” a source familiar with the situation said, adding that the proposed joint venture would be a 50/50 split and could be finalized by October or November.
A second source added that the deal is still pending regulatory approvals.
Both sources said that the Chinese city of Tianjin and Singapore are options for the location of the joint venture.
In 2017, Zhenhua won a term contract for the supply of diesel fuel to SOMO, the company also recently agreed to develop Iraq’s East Baghdad oilfield.
A separate Singapore-based trading source told Reuters that Zhenhua has been marketing Iraqi Basra Light crude since the start of 2018, some of which has been sold to Taiwan.