China cancels 80% of Iraq debt

[xinhui]

China cancels 80% of Iraq debt

(AFP) – 8 hours ago

BAGHDAD — China has agreed to cancel 80 percent of the 8.5-billion-dollar debt it is owed by Iraq, the finance ministry in Baghdad said in an official statement on Tuesday.

It said a bilateral agreement was signed in Beijing, without specifying the date, and that China's ambassador to Iraq had met officials in Baghdad to confirm the agreement.

The statement added that the two countries entered into trade deals valued at 3.8 billion dollars in 2009.

In Beijing, foreign ministry spokesman Ma Zhaoxu told AFP "China and Iraq have reached an agreement not long ago... to substantially cancel the debts Iraq owes to Chinese companies."

"China has long been assisting Iraq to realise stability and development by offering aid, cutting debts and helping its economic restoration," he said in a faxed statement.

Beijing "exempted in 2007 all the debts Iraq owed to the Chinese government," the statement added, without giving specific figures.

State-owned Chinese oil firm CNPC has clinched some of the biggest deals in the Iraqi oil sector since the US-led invasion that toppled Saddam Hussein in 2003.

It was the leading member of a successful consortium bidding for the Halfaya field in southern Iraq in December.

The Chinese firm had already signed a deal last year, along with Britain's BP, to ramp up production at Iraq's biggest oil field, Rumaila.

Those two deals are in addition to a contract signed in 2008 by CNPC to develop another oil field south of Baghdad, giving it a major presence among foreign energy firms operating in the conflict-wracked country.
AFP: China cancels 80% of Iraq debt

[xinhui]

The Associated Press February 2, 2010, 8:25AM ET text size: TT
Iraq: China to write off 80 percent of Iraq debt

By SINAN SALAHEDDIN
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BAGHDAD

Iraq said Tuesday that China has agreed to write off 80 percent of Iraq's debt, a move that could further push Chinese business interests in the war-battered nation as Baghdad seeks international investments to fund reconstruction.

Iraq's Saddam Hussein-era debt to China stands at $8.5 billion, the Finance Ministry said in a statement posted on its Web site. A major portion of the Saddam regime's foreign debt has already been canceled by key creditor nations.

The Finance Ministry said the promise came after a meeting between China's ambassador in Baghdad and Iraq's Finance Minister Bayan Jabr. The statement, dated Jan. 31, quoted Jabr as saying the write-off "will enhance economic cooperation between the two friendly countries."

Jabr called on the Chinese government to send a delegation to sign the final deal in Baghdad.

The deal comes as the state-run China National Petroleum Corp. has secured two lucrative oil deals that reflects China's drive to seek new energy sources for its growing economy.

The two countries' trade volume reach a total of $3.8 billion during the first nine months of last year -- a 78 percent increase from the same period the previous year, the statement said.

The first Chinese-led oil deal was in 2008 to develop the 1 billion-barrel al-Ahdab oil field in central Iraq. The $3 billion pact was the first made by the new Iraqi government after the 2003 U.S.-led invasion, which China, which had strong ties with Saddam's regime, had opposed.

The second deal was made during Iraq's first postwar bidding round in June. CNPC and partner BP PLC won the rights to develop Iraq's biggest oil field, the 17.8 billion-barrel Rumaila field in Basra. The agreement was formally signed late last year.

In December 2008, the Paris Club of creditor nations concluded an agreement to cancel 80 percent of the $125 billion in Saddam-era debts to the 19-nation group.

The Paris Club describes itself as an informal group of creditors, that includes most European powers, Japan and the United States. China is not a member.

Iraq: China to write off 80 percent of Iraq debt - BusinessWeek