China plans to make its second major business enterprise in Iraq as Royal Dutch Shell Plc has teamed up with Chinese state oil firms to jointly bid for oil projects in Iraq. The first project was of state oil company CNPC's $3 bln project to develop the al-Ahdab field, Iraq's first major oil deal with a foreign firm since the fall of Saddam Hussein. With this, Royal Dutch plans to expand its presence in the vast fuel retail and refining businesses in China, currently dominated by state-run Chinese giants that are keen to boost oil reserves overseas.
Shell is also scrutinizing the expansion of downstream businesses in China. Shell, the world's second-largest non-government controlled oil company by market value, has been downsizing its refining and retail assets in Europe and Africa on deteriorating demand, but is keen to expand its presence in China. It has marked its entry in China after setting up a small joint-venture fuel marketing firm with top Chinese refiner Sinopec Corp. Shell's potential investment targets include a proposed refinery in a tie-up with PetroChina and Qatar. Shell may also team up with Kuwait Petroleum Corp to build a refining and petrochemical complex with Sinopec Corp. The project awaits approval from Beijing's environmental agency.