Iraq, TotalEnergies Ink $27 Billion oil, Gas & Renewables Deal
Iraq and French oil giant TotalEnergies have agreed to a $27 billion energy contract that will strengthen the nation's ability to create energy through the development of four oil, gas, and renewable energy projects. The agreement, which was first signed in 2021 but delayed due to disagreements between Iraqi lawmakers over its conditions, was ultimately completed in April when Iraq agreed to accept a 30% stake in the project, which was less than what it had initially sought.
QatarEnergy owns the remaining 25%, with TotalEnergies owning 45% of the company. At a ceremony in Baghdad, the deal was signed by TotalEnergies Chairman and CEO Patrick Pouyanne and Iraqi Oil Minister Hayan Abdel-Ghani. Pouyanne referred to the occasion as "historic day." He stated that construction on the project would begin this summer and require an expenditure of $10 billion over the following 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.
By recovering flared gas from three oilfields and utilizing it to fuel power plants, the Gas Growth Integrated Project (GGIP) seeks to increase the nation's electricity supply while also lowering Iraq's import costs. Inviting the Saudi business ACWA Power to join the project, TotalEnergies said that it would also build a 1 GW solar power facility to supply electricity to the Basra regional grid.
“It is the real beginning of investment in renewable energy in Iraq,” Abdel-Ghani said of the solar project.
The drought-stricken Iraq will be able to use seawater instead of the scarce freshwater from rivers and marshes in the water-intensive oil production process thanks to the GGIP, which includes a treatment plant.
“I hope that this will be a strong signal to other investors to come to Iraq,” Pouyanne said.