The “Total Energy” group announces an agreement to implement a $10 billion contract with Iraq

After sharp disagreements and long negotiations, Iraq and the giant French “Total Energy” group reached an agreement to implement investments worth $ 10 billion, announced in 2021. It aims, in particular, to improve a dilapidated electricity network that causes power outages everywhere.

The Iraqi Ministry of Oil said in February that the implementation of the contract with the oil group is still facing points of contention, especially at the level of Iraq’s participation in the project scheduled for 25 years.

The Iraqi prime minister visited Paris while the group’s CEO, Patrick Pouyanné, was in Baghdad this weekend at the invitation of the prime minister, according to Total Energy.

In the end, Baghdad, which wanted 40 percent of the project, agreed to reduce its share to 30 percent, as revealed in a report published by the Iraqi Council of Ministers late Tuesday evening, given “the importance of resolving the aforementioned issue and proceeding with the signing of related agreements.”

Shortly after that, the French group published a statement announcing an agreement with the Iraqi government on “a thirty percent stake in the Basra Oil Company” in this project called the “Integrated Gas Growth Project” (Gas Growth Integrated Project).

The consortium will include Total Energy (45 percent), Basra Oil Company (30 percent) and Qatar Energy (25 percent).

The French group said, “Thanks to the talks that took place in the past months, especially for four times, between the Sudanese Prime Minister (Iraqi Muhammad Shiaa) and the company’s general manager, Patrick Pouyanne, the Iraqi government and Total Energy confirmed all the terms of the contract signed in 2021 and jointly defined the conditions and mutual guarantees necessary to move forward.” with the project.”

Total Energy welcomed the Iraqi government’s commitment to this contract, which sends a strong and positive signal to foreign investments in the country.

Electricity and oil

Iraq’s dilapidated electricity grid, a collateral victim of corruption, is struggling. Power outages may last 12 hours a day in this hydrocarbon-rich country.

The French group, which has been in Iraq since the 1920s, will invest in the oil exploitation sector, with its partners, in four projects in the fields of fuel and electricity production.

One of these projects aims to “collect flared gas from three oil fields to supply gas to power stations.” Another project is the development of a giant solar power plant with a capacity of 1 gigawatt “to feed the electricity grid in the Basra region.”

In agreement with the Iraqi authorities, Total Energy invited the Saudi company ACWA Power to “participate in this solar energy project.”

The group stated that the investments worth about ten billion dollars are supposed to also allow “the construction of a seawater treatment plant with the aim of maintaining pressure on some oil fields and increasing regional production.”

A fourth project concerns oil to increase production in the Artawi oil field in southern Iraq from 85,000 barrels per day to 210,000 barrels.

Upon signing the contract in 2021, the Iraqi government said it was “the largest investment by a Western company” in the country.

She spoke at the time of a contract worth a total of 27 billion euros to invest in the country’s production of oil, gas and solar energy. But the investments currently amount to 10 billion euros, which were confirmed on Wednesday.