Iraq originally wanted a 40% share in the project, but has now accepted a 30% share
04 April 2023 - 15:47
by Ahmed Rasheed and Maha El Dahan
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Iraq has reached an agreement to hold a 30% stake in TotalEnergies’ long-delayed $27bn project in the country, three sources said on Tuesday, reviving a deal that Baghdad hopes could lure back foreign investment into the battered country which craves stability.
The deal was signed in 2021 for TotalEnergies to build four oil, gas and renewables projects with an initial investment of $10bn in southern Iraq over 25 years.
But it has experienced several setbacks amid disputes between Iraqi politicians over terms.
Iraq, Opec’s second-largest producer, has for years been plagued by war, corruption and sectarian tension holding back its potential.
Iraq’s demand for a 40% share in the project was a main sticking point because TotalEnergies wants a majority stake.
The agreement to lower the share to 30% was struck after meetings in Baghdad over the past few days, an industry source said.
TotalEnergies did not immediately respond to a request for comment.
“The deal should be activated within days,” a senior Iraqi oil ministry official said.
The project includes the construction of a natural gas gathering network to supply local power stations through the expansion of the Ratawi field, building a large-scale seawater treatment facility to boost output from other fields using water injection and a large solar power plant in the Basra region.
QatarEnergy would also take part in the consortium and would have a share in the project, sources said.
Sources had said in January that QatarEnergy was looking at a stake in the project.
QatarEnergy did not immediately respond to a request for comment.
A big investment by a Gulf state in the project would also mark an important win for Iraqi Prime Minister Mohammed al-Sudani, who took office in October 2022 after more than a year of political turmoil, and would be considered a step towards countering Iranian influence.
A revival of the project is vital to Baghdad’s efforts to reverse the exit of oil majors from the country.
ExxonMobil, Shell and BP have all scaled back their operations in Iraq in recent years, contributing to a stagnation in Iraq’s oil production.
Iraq's oil production capacity has remained at about 5-million barrels a day in recent years. Yet at one time there had been hopes of rivalling top producer Saudi Arabia with its output of 12-million barrels a day, more than a tenth of global demand.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Baghdad ‘agrees on TotalEnergies deal’
Iraq originally wanted a 40% share in the project, but has now accepted a 30% share
Iraq has reached an agreement to hold a 30% stake in TotalEnergies’ long-delayed $27bn project in the country, three sources said on Tuesday, reviving a deal that Baghdad hopes could lure back foreign investment into the battered country which craves stability.
The deal was signed in 2021 for TotalEnergies to build four oil, gas and renewables projects with an initial investment of $10bn in southern Iraq over 25 years.
But it has experienced several setbacks amid disputes between Iraqi politicians over terms.
Iraq, Opec’s second-largest producer, has for years been plagued by war, corruption and sectarian tension holding back its potential.
Iraq’s demand for a 40% share in the project was a main sticking point because TotalEnergies wants a majority stake.
The agreement to lower the share to 30% was struck after meetings in Baghdad over the past few days, an industry source said.
TotalEnergies did not immediately respond to a request for comment.
“The deal should be activated within days,” a senior Iraqi oil ministry official said.
The project includes the construction of a natural gas gathering network to supply local power stations through the expansion of the Ratawi field, building a large-scale seawater treatment facility to boost output from other fields using water injection and a large solar power plant in the Basra region.
QatarEnergy would also take part in the consortium and would have a share in the project, sources said.
Sources had said in January that QatarEnergy was looking at a stake in the project.
QatarEnergy did not immediately respond to a request for comment.
A big investment by a Gulf state in the project would also mark an important win for Iraqi Prime Minister Mohammed al-Sudani, who took office in October 2022 after more than a year of political turmoil, and would be considered a step towards countering Iranian influence.
A revival of the project is vital to Baghdad’s efforts to reverse the exit of oil majors from the country.
ExxonMobil, Shell and BP have all scaled back their operations in Iraq in recent years, contributing to a stagnation in Iraq’s oil production.
Iraq's oil production capacity has remained at about 5-million barrels a day in recent years. Yet at one time there had been hopes of rivalling top producer Saudi Arabia with its output of 12-million barrels a day, more than a tenth of global demand.
Reuters
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