TotalEnergies, Iraq Agree on Delayed $10B Contract

The $10 billion project, which was delayed due to disagreements over the terms of a contract aimed at enhancing the country’s electricity supply, was finally agreed upon with Iraq, according to an announcement made on Wednesday by the French energy giant TotalEnergies.

The contract, which was initially signed in 2021, involves investments in the production of solar, gas, and oil.

However, there was a rift between the two parties regarding the conditions; a spokesman for the Iraqi oil ministry stated earlier this year that Baghdad desired a 40% stake, with TotalEnergies receiving a 60% share.

According to a ministry source, the French firm preferred that Iraq hold a smaller stake.

The report from TotalEnergies, the Basrah Oil Company of Iraq will receive a 30% stake in the project, while QatarEnergy will receive a 25% stake and the French company will hold a 45% ownership position.

According to the company, the agreement was reached after four rounds of negotiations between Iraqi Prime Minister Mohammed Shia al-Sudani and TotalEnergies CEO Patrick Pouyanne.

Despite having abundant hydrocarbon reserves, Iraq’s electricity infrastructure is outdated and plagued by widespread corruption, resulting in hours-long power outages.

Iraq presently receives a third of its gas and electricity from neighboring Iran, and Baghdad is working to increase its energy independence.

Flared gas from oil fields is recovered as part of the $10 billion Gas Growth Integrated Project (GGIP), which will be used to fuel electricity-generating facilities.

Based on TotalEnergies, the Saudi company ACWA Power will participate in the construction of a one-gigawatt solar power plant to deliver electricity to the regional grid in Basra.

In response to the French company, the GGIO also calls for building a seawater treatment facility to provide water for oil production as an alternative to using fresh water from rivers and aquifers.