The Iraqi government has finally reached an agreement to take a 30% stake in TotalEnergies’ long-delayed $27 billion Iraq project, Reuters reported Tuesday, citing three sources familiar with the talks.
The deal, which has experienced several delays amid disagreements between Iraqi lawmakers over terms, is central to Baghdad’s efforts to lure back foreign investment after several oil majors decreased their operations in the politically fragmented and unstable country over recent years.
In 2021, French energy giant TotalEnergies agreed to build four oil, gas and renewables projects in the Levantine country with an initial investment of $10 billion in southern Iraq over 25 years. Initially, a key condition of the deal was for the Iraqi government to have a 40% stake in the project, but the new agreement for the lower share was struck after meetings in Baghdad over the past few days, an industry source told Reuters.
A senior Iraqi Oil Ministry official said that the deal should be activated within days and QatarEnergy is also understood to have a share in the $27 billion project, the newswire reported.
Iraqi officials have stressed that the deal will need to have the full support of Iraq’s government.
Al-Monitor has contacted TotalEnergies and the Iraqi Oil Ministry for comment.
Iraqi officials have often talked up the project, only to be met with colder words from Total. For example, on March 20, Iraqi Oil Minister Hayan Abdulghani said that the two parties had “reached advanced stages” in the talks and that the deal would be activated imminently. Two days later, TotalEnergies chief executive Patrick Pouyanne said that the deal still needed a “political answer.”
Iraq, OPEC’s second largest producer, has seen its oil output slow in recent years after BP, ExxonMobil and Shell all scaled down their operations there. The country has an average daily output of 3.3 million barrels a day, which is dwarfed by OPEC’s leading producer Saudi Arabia’s output of 11.5 million bpd last year.
Separately, the Kurdistan Regional Government announced on Tuesday that it reached an agreement with the federal government on their oil dispute after a court ruled to halt the region’s oil exports to Turkey.