“This is the largest investment in Iraq by a Western company,” said Oil Minister Ihsan Abdul-Jabbar Ismail. “Implementing these projects is the challenge we face now.”
TotalEnergies will make an initial investment of $10 billion and will begin work “immediately,” said CEO Patrick Pouyanne.
Three of the contracts were signed with Iraq’s oil ministry. One is to boost production at Basra’s Artawi oil field from 85,000 to 210,000 barrels per day.
Another is construction of a gas plant at Artawi, with a capacity to produce 300 million square feet per day initially, and double that after the second phase of development. It will reduce gas flaring and decrease reliance on gas imports.
A third project is to inject seawater into southern Iraq oilfields to enhance oil extraction.
The fourth contract was signed with Iraq’s electricity ministry to build a 1,000 megawatt solar power plant.
“The agreement aims to achieve optimal investment of Iraq’s wealth, including oil and gas reserves and water resources, and to secure a high degree of stability for electrical energy, as well as raising oil production capacity,” read a statement from the prime minister’s office. The contracts were signed in the presence of Iraqi Prime Minister Mustafa al-Kadhimi and a week after French President Emmanuel Macron attended the Baghdad summit in the Iraqi capital, a conference to improve regional cooperation.
Iraq is dependent on fuel and electricity imports from its neighbours to keep the lights on. Blackouts this summer were caused by a number of factors including terror attacks on the power grid and Iran’s cuts to electricity and gas exports because of unpaid bills.
This month, Iran announced it was slashing its gas exports to Iraq, on agreement with Baghdad.
"Natural gas exports to Iraq have decreased by 38 million cubic meters per day,” Mohammad Reza Julaei, dispatching director of the National Iranian Gas Company (NIGC), told Shana news.
“This reduction has been done according to a six-month agreement with the Iraqi side and has nothing to do with their arrears to Iran, although the need to settle the debts is still on the agenda,” he added.
Iran had been exporting 40 to 45 million cubic metres of gas daily to its neighbor, which receives sanctions waiver from the United States allowing the trade.
Baghdad is boosting its investment in solar power. In August, it signed an agreement with PowerChina for the construction of solar power plants with a capacity of 2,000 megawatts.
