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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Iraq Inks Long-Awaited $27 Billion Energy Deal With TotalEnergies

  • The government of Iraq and TotalEnergies have signed a $27 billion deal that should boost the country’s oil production and its reliance on domestic gas for power generation.
  • The deal dates back to 2021 and involves the development of low-carbon energy in Iraq and the recovery of associated gas that the country currently flares.
  • Per the final terms of the deal that the two sides signed today, TotalEnergies will hold 45% in the ventures and QatarEnergy will hold 25%.

 

The government of Iraq and TotalEnergies earlier today signed a long-awaited deal worth $27 billion that should see Iraq’s oil production grow and boost its reliance on domestic gas for power generation.

The deal also involves the development of low-carbon energy in Iraq, Reuters reported.

The deal dates back to 2021 when TotalEnergies signed multi-energy agreements in Iraq for the construction of a new gas network and treatment units, the construction of a large-scale seawater treatment unit, and the construction of a 1-gigawatt photovoltaic power plant in the southern Iraqi region of Basra.

The French company signed agreements with the Iraqi Ministries for oil and electricity and the country's National Investment Commission.

Part of the proposal was the construction of installations to recover associated gas that is being flared on three oil fields and, as such, supply gas to 1.5 GW of power generation capacity in the first phase, growing to 3 GW in a second phase, and also develop 1 GWac of solar electricity generation capacity to supply the Basra regional grid.

Iraq is currently one of the biggest gas-flaring oil producers globally.

The initial amount to be invested in the megadeal was $10 billion, to be distributed over 25 years but the finalization of the deal was delayed by disputes in Iraq’s government about the terms of the agreement.

Eventually, earlier this year, the authorities in Baghdad agreed to a lower stake of 30% in the projects, down from an initially proposed 40%, clearing the way to the deal’s finalization.

Per the final terms of the deal that the two sides signed today, TotalEnergies will hold 45% in the ventures, and QatarEnergy will hold the remainder of 25%. A Saudi company, ACWA Power has been invited to take part in the solar plant construction project for Basra.

By Irina Slav for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on July 10 2023 said:
    If implemented without last minute dithering from Iraq, the agreement will boost Iraq’s oil production and recover the bulk of flared gas from Iraqi oil fields for electricity generation thus reducing Iraq’s dependence on gas supplies from Iran.

    Iraq sits on oil reserves estimated by international oil experts who assessed Iraq's oil potential at 400 billion barres between proven, semi-proven and recoverable.

    TotalEnergies will also build a large-scale seawater treatment unit and a 1-gigawatt photovoltaic power plant in Basra.

    TotalEnergies will hold 45% in the ventures, and QatarEnergy will hold the remainder of 25% with Iraq holding 30%. A Saudi company, ACWA Power has been invited to take part in the solar plant construction project for Basra.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • George Doolittle on July 10 2023 said:
    Everyone now suddenly producing all out hard to imagine just one discovery off of Guyana that has proved to be beyond belief economic caused all of this.

    Iraq as does this entire Region still consumed with instability all made worse now by Russia now even France proper but of course Turkey even Germany.

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