Iraq and French oil major TotalEnergies on Monday signed a long-delayed $27 billion energy deal that aims to increase oil production and boost the country’s capacity to produce energy with four oil, gas and renewables projects.
Initially signed in 2021, the deal faced delays amid disputes between Iraqi politicians over the terms, but was finally closed in April when Iraq agreed to take a smaller than initially demanded stake in the project of 30%.
TotalEnergies took a 45% stake and QatarEnergy holds the remaining 25%.
TotalEnergies Chairman and CEO Patrick Pouyanne signed the agreement with Iraqi oil minister Hayan Abdel-Ghani at a ceremony in Baghdad, with Pouyanne calling it a “historic day”.
He said the project would break ground this summer and would see an investment of $10 billion over the next four years. “This is the starting day, and we’ll deliver the projects in the next four years for the benefit of everybody in Iraq,” he said.
The Gas Growth Integrated Project (GGIP) aims to improve the country’s electricity supply, including by recovering flared gas at three oilfields and using the gas to supply power plants, helping to reduce Iraq’s import bill.
TotalEnergies said it would also develop a 1GW solar power plant to supply electricity to the Basra regional grid, inviting Saudi company ACWA Power to join the project. “It is the real beginning of investment in renewable energy in Iraq,” Abdel-Ghani said of the solar project. At one time, Iraq rivalled top producer Saudi Arabia with its output of 12 million bpd, over a tenth of global demand.
Published in The Express Tribune, July 11th, 2023.
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