Sinochem Group, China's fourth-largest oil company, said it has got permission to participate in Iraq's second auction of oil and gas fields in November.
Sinochem is one of the 45 companies qualified to participate in the second bidding round, a company statement said on Friday without specifying which fields it was interested in.
With this, the company now has overseas exploration and production rights in 14 oil and gas blocks in six countries.
It had earlier participated in the first bidding round for Iraqi oil fields in June last year.
Analysts said the move shows that domestic oil companies are increasingly looking towards Iraq, which has the third largest proved oil reserves in the world.
"It is of strategic importance for domestic oil companies to get a foothold in the Middle East," said Han Xiaoping, a veteran energy analyst in Beijing.
Zhou Jiping, president of PetroChina, the listed arm of China National Petroleum Corp (CNPC), said on Friday that the company was interested in bidding for more Iraqi oil fields in the second round of bidding, after winning a joint bid with BP for the Rumaila field in the first round.
Iraq made its first auction of major oil contracts in June since the US-led invasion. China's oil majors all took part in the bidding. Only CNPC, which teamed up with BP, won a contract to develop the Rumaila oilfield.
The CNPC-BP contract was also the only one to be awarded in the first auction, as there were some differences between the Iraqi government and oil majors over payment terms.
According to one source close with the deal, China's other oil majors including CNOOC will also consider participating in the second round.
"Domestic companies can never find bigger opportunities in other places than in Iraq. What can help them is that some companies have already had some experience working in the country," he said, asking not to be named.
Last year CNPC signed a service agreement to help Iraqi partners develop the Al-Ahdab oilfield, 180 km southeast of Baghdad.
Iraq plans to award contracts for the six partly developed and four undeveloped fields in its second licensing round. It has proposed better contract terms than in the first round.
A senior Iraqi oil official had earlier said Iraq would blacklist China's largest oil refiner Sinopec and prohibit it from competing in a second bidding round for oilfield tenders if it confirms its purchase of Swiss oil explorer Addax Petroleum Corp, Reuters reported.
Iraq's Deputy Oil Minister Abdul Karim Louaibi told Reuters the ministry had sent Sinopec a letter asking it about Addax, which is among the foreign oil firms that have signed independent oil deals with semi-autonomous Kurdish authorities in northern Iraq.
"The oil ministry is committed to not dealing with any oil company that signs oil contracts (with the Kurdish Regional Government) without the approval of the central government and Iraqi oil ministry," Louaibi said.
Sinopec's spokesman in Beijing could not be reached for comment yesterday.
(China Daily September 1, 2009)