French oil company Total Energies confirmed on Wednesday that it had reached an agreement with Iraq on a long-delayed $27 billion project, reviving a deal Baghdad hopes will attract foreign investment to the country.

The agreement was signed in 2021, under which Total Energies will implement 4 oil, gas and renewable energy projects with an initial investment of $ 10 billion in southern Iraq over 25 years, but the project has been postponed long, amid disagreements over the terms of the agreement.

The French company said in a statement that "the Iraqi government and Total Energies have agreed on a 30% contribution to the Basra Oil Company in the project," known as the Gas Growth Integrated Project.

The French company said the deal reached with the Iraqi government "sends a strong and positive message about foreign investment in the country".

Project Objectives

The "Integrated Gas Growth Project" aims to improve Iraq's electricity supply, including the recovery of gas burned in 3 oil fields, or torch gas, to supply power plants.

Total Energies said it would also develop a one-gigawatt solar power plant to provide electricity to Basra's regional grid and invited Saudi Arabia's ACWA Power to join the project.

For its part, a statement by the Iraqi government said that it approved the recommendations of the Ministerial Council of Energy in the government on the contract for the integrated gas growth project with Total Energies after making an amendment to the participation rate of the government side from 40% to 30% to proceed with the signing of agreements related to it.

The statement pointed out that the share of the Iraqi government side in the contract is $ 1.4 billion, while the Basra Oil Company will be the government partner in the contract with Total Energies.

Qatar Energy Participates in Iraq Integrated Gas Growth Project #قطر_للطاقة #قطر pic.twitter.com/jml90n4N6I

— QatarEnergy (@qatarenergy) April 5, 2023

Qatar Energy Participates in the Project

Meanwhile, Qatar Energy has agreed to acquire a 25% stake in the Integrated Gas Development Project (GGIP), which aims to develop Iraq's natural gas resources.

According to a company statement, the project consortium will consist of:

  • Basra Oil Company (30%).
  • Total Energies (45% operator).
  • Qatar Power (25%).

This is after completing contractual arrangements and obtaining the usual regulatory approvals.

Eng. Saad Sherida Al-Kaabi, Qatar's Minister of State for Energy Affairs, Managing Director and CEO of Qatar Energy, said: "We thank Total Energies for inviting us to partner with them, and we thank the esteemed Iraqi government for welcoming us as a member of this partnership."

"We are delighted to be part of this important and vital project for the energy sector in the sisterly Republic of Iraq, and we look forward to working with our partners in Total Energies and Basra Oil Company to make this project a success."

"I would like to thank the Iraqi government for its valuable support in reaching this agreement, and for its confidence in Qatar Energy as a reliable partner," Al-Kaabi said.