Baghdad agrees to 30% stake in TotalEnergies $27b Iraq energy project

Baghdad has reached an agreement to hold a 30 per cent stake in TotalEnergies long-delayed $27 billion Iraq project, three sources told Reuters on Tuesday, reviving a deal that Baghdad hopes could lure back foreign investment into the battered country which craves stability.

The deal was signed in 2021 for TotalEnergies to build four oil, gas and renewables projects with an initial investment of $10 billion in southern Iraq over 25 years.

But it has experienced several setbacks amid disputes between Iraqi politicians over terms.

Iraq, Opec’ second largest producer, has been for years plagued by war, corruption and sectarian tensions that have held back its potential.

Iraq’s demand for a 40 per cent share in the project was a key sticking point as TotalEnergies wants a majority stake.

The agreement to lower the share to 30 per cent was struck after meetings in Baghdad over the past few days, an industry source said.

TotalEnergies did not immediately respond to a request for comment. “The deal should be activated within days,” a senior Iraqi oil ministry official said.

The project includes the construction of a natural gas gathering network to supply local power stations through the expansion of the Ratawi field, building a large-scale seawater treatment facility to boost output from other fields using water injection and a large solar power plant in the Basra region.

Iraq’s oil production capacity has remained at around 5 million bpd in recent years. Yet at one time there had been hopes of rivalling Saudi Arabia with its output of 12 million bpd, more than a tenth of global demand.