TotalEnergies closes delayed $10 billion deal with Iraq
French energy giant TotalEnergies announced on Wednesday, April 5, an agreement with Iraq on a $10 billion project that had been delayed due to disagreements over the terms of a deal aimed at improving the country's electricity supply.
The contract, originally signed in 2021, includes investments in oil, gas and solar production. But the two sides had disagreed over the terms, with an Iraqi oil ministry spokesman saying earlier this year that Baghdad wanted a 40% stake, with TotalEnergies getting 60%. A source at the ministry said the French company wanted Iraq to have a smaller stake.
TotalEnergies said Wednesday that Iraq's Basrah Oil Company will get a 30% stake in the project while a Qatari firm – QatarEnergy – will get 25% and the French firm will own 45%. The agreement follows four rounds of talks between TotalEnergies chief executive Patrick Pouyanne and Iraqi Prime Minister Mohammed Shia al-Sudani, the company said.
Iran's neglected electricity grid
Despite being home to a wealth of hydrocarbon reserves, Iraq's neglected electricity grid is dilapidated and a victim of the country's rampant corruption, with power cuts lasting for hours. Neighboring Iran currently supplies a third of Iraq's gas and electricity, and Baghdad is seeking greater energy independence.
The $10 billion Gas Growth Integrated Project (GGIP) includes recovering flared gas from oil fields to power electricity-generation plants. A one-gigawatt solar power plant will be built to supply electricity to the Basra regional grid, with Saudi firm ACWA Power joining the project, TotalEnergies said.
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The GGIO 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 French firm said. "TotalEnergies welcomes the continuity of the voice of the State of Iraq on this Development & Production Contract, which is a strong and positive signal for foreign investment in the country," the company said.
