The government of Iraq and French oil company TotalEnergies have signed contracts worth $27bn for developments in oil, gas and solar.
The first phase, which involves Total investing $10bn in Iraq, will begin immediately. Ihsan Abdul-Jabbar Ismail, Iraq’s oil minister, said the package was ”the largest investment in Iraq by a Western company”, adding, however, that implementing them would be a “challenge”.
As well as increasing oil production at the Artawi oil field in southern Iraq and developing a gas processing plant there, the Paris-based company will build a 1GW solar plant in the Basra region.
Patrick Pouyanné, TotalEnergies’ chairman and chief executive, commented: “This project perfectly illustrates the new sustainable development model of TotalEnergies, which supports producing countries in their energy transition by combining the natural gas and solar energy to meet the growing demand for electricity.
“It also demonstrates how TotalEnergies can leverage its unique position in the Middle East, a region where the lowest-cost hydrocarbons are produced, to gain access to large-scale renewable projects,” he added.
The increase in oil production will be achieved by building a large-scale seawater treatment unit to increase water injection. It is hope that this will increase production from 85,000 to 210,000 barrels a day.
The construction of gas gathering network will supply the local power stations with natural gas that would otherwise have been flared.
Iraq is presently dependent on fuel and electricity imports. Local news site Rudaw comments that 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”.
Iraq has been importing 40 to 45 million cubic metres of gas a day from Iran.
Iraq is also aiming to increase solar power production. In August, the government signed an agreement with PowerChina for the construction of solar power plants with a capacity of 2GW, and in June it signed a deal with Abu Dhabi-based Masdar to develop another 2GW of solar (see further reading).
Image: Mustafa as-Kadhimi, prime minister of Iraq watches as Patrick Pouyanné (left) and Ihsan Abdul-Jabbar Ismail sign the deal on Sunday (Office of the Iraqi Prime Minister)