Iraq, TotalEnergies sign agreement for delayed $10B deal

Iraq on Monday signed agreements with TotalEnergies for a $10 billion set of projects that aim to improve the country’s electricity supply through capturing flared gas and harnessing solar energy.

The deal, originally unveiled in 2021 but delayed by disagreements over the terms, was signed by TotalEnergies CEO Patrick Pouyanne and Iraq’s Oil Minister Hayan Abdel Ghani at a ceremony held at Iraq’s Ministry of Oil headquarters in Baghdad after lengthy negotiations.

“Today, we commit with Total and all partners to serious and fruitful cooperation to begin implementing these contracts in the field,” said Abdel Ghani during a speech before the signing of the four projects.

“TotalEnergies will retain 45 percent of the project, Basrah Oil Company 30 percent, and QatarEnergy will join us with 25 percent,” Pouyanne told AFP.

“In one month, the concrete steps will begin on the ground, including infrastructure construction,” Iraqi oil official Bassem Khdeir told AFP, adding that “in three years, the projects will bear fruit”.

The first part of the $10 billion Gas Growth Integrated Project (GGIP) aims to recover flared gas from oil fields to power electricity-generation plants.

Another will involve the construction of a one-gigawatt solar plant to supply electricity to the Basra regional grid.

The deal also aims at increasing production to 210,000 barrels per day at Artawi oil field in the south of the country.

The GGIP also includes the construction of a seawater treatment plant to provide water used in oil production — an alternative to using fresh water from rivers and aquifers.

The project will eventually produce five million barrels of water per day, according to officials at the ceremony.

Pouyanne told AFP that work will start on the ground over the summer.

“The first phase of the solar plant will come in two years, and then we will work to implement a first phase on the oil field, which should increase production to 120,000 barrels per day within two years as well,” he added.

Pouyanne said the entire set of projects is expected to be completed by 2027-2028, putting the total cost at over $10 billion.

When the Iraqi government first announced the deal in September 2021, it spoke of a $27 billion project, a figure that factored in operating costs over the years. — Agence France-Presse