France’s TotalEnergies agrees $10bn contract with Iraq

Today, April 5, the French energy company TotalEnergies announced on the final approval of a $10 billion contract with the government of Iraq. The preliminary contract was signed in 2021, however, according to data French media, since then there have been negotiations to agree on the size of the shares in the project. According to unofficial media reports, earlier the Iraqi side wanted a 40% share, and for the French – 60%. The final decision was made after four rounds of negotiations between TotalEnergies CEO Patrick Poyan and Iraqi Prime Minister Mohammed Shia al-Sudani: the French will receive a 45% stake in the project, the Iraqi Basrah Oil Company – 30%, and the Qatari company QatarEnergy – 25%.

As part of the agreements between the French company and the government of Iraq, TotalEnergies will invest in oil, gas and solar energy projects in Iraq. In particular, associated gas will be extracted from three oil fields, after which this gas will be used to generate electricity. In addition, a plant will be built to prepare sea water for injection into oil reservoirs in order to stop using fresh water from rivers and reservoirs, which is more valuable to Iraq.

The French company will also build a 1 GW solar power plant in Iraq to power Basra’s regional power grid. As part of an agreement with the Iraqi authorities, the French company will involve the Saudi company ACWA Power in the construction of this power plant.

Evgeniy Khvostik