Iraq, TotalEnergies sign agreement for delayed $10bln deal
3 Min Read
The deal was originally unveiled in 2021, but it was delayed by disagreements over the terms.
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The deal's purpose is to increase the production to 210,000 barrels per day at Artawi oil field (AFP)
As part of a $10 billion package of projects, Iraq and TotalEnergies signed agreements on Monday to increase the nation's electricity supply by recovering flaring gas and utilizing solar energy.
After protracted talks, the agreement, which was initially announced in 2021 but was postponed due to differences over the conditions, was finally signed by TotalEnergies CEO Patrick Pouyanne and Iraq's Oil Minister, Hayan Abdel Ghani, during a ceremony held at the Ministry of Oil's headquarters in Baghdad.
Before the signature of the four projects, Abdel Ghani said: "Today, we commit with Total and all partners to serious and fruitful cooperation to begin implementing these contracts in the field."
Read: TotalEnergies agrees on $10 bn delayed deal with Basra Oil Company
"TotalEnergies will retain 45 percent of the project, Basrah Oil Company 30 percent, and QatarEnergy will join us with 25 percent," Pouyanne told AFP.
"In one month, the concrete steps will begin on the ground, including infrastructure construction," Bassem Khdeir, the Iraqi oil official, told AFP, adding that "in three years, the projects will bear fruit."
The $10 billion Gas Growth Integrated Project (GGIP)'s initial phase is focused on recovering flared gas from oil fields for use in electricity-generating facilities.
A one-gigawatt solar power plant will be built and connected to the Basra regional grid.
The agreement also intends to boost the Artawi oil field's daily production to 210,000 barrels in the south of the nation.
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As an alternative to using fresh water from rivers and aquifers, the GGIP also calls for the development of a seawater treatment plant to supply water used in oil extraction.
According to representatives present at the ceremony, the facility would eventually produce five million barrels of water per day.
Work on the ground will begin throughout the summer, Pouyanne told AFP, adding that "The first phase of the solar plant will come in two years, and then we will work to implement a first phase on the oil field, which should increase production to 120,000 barrels per day within two years as well."
According to Pouyanne, the full set of projects will likely be finished by 2027–2028, with a total cost of more than $10 billion.
The deal's initial announcement by the Iraqi government in September 2021 mentioned a $27 billion project, a sum that took into account ongoing operational expenses over time.
