ECONOMY
Flare stacks burn in the Nahr Bin Omar oil field and facility near Iraq's southern port city of Basra on April 4, 2023. Photo: Hussein Faleh/AFP
ERBIL, Kurdistan Region - The Iraqi government and French TotalEnergies on Wednesday announced that they have reached an agreement to move forward with a gas growth project initially signed in 2021, with the French firm and its partners set to invest $10 billion.
According to the deal, the French energy giant will build four projects for oil, gas, and renewables in southern Iraq in the span of 25 years. The contract had originally been signed in 2021 but faced a delay due to disagreements over Iraq’s stake in the deal, with Baghdad demanding a 40 percent share, according to sources cited by AFP.
TotalEnergies will have the lion’s share with a 40 percent stake of the so-called Gas Growth Integrated Project (GGIP), followed by Iraqi state-owned Basra Oil Company with 30 percent, and QatarEnergy with 25 percent.
The project seeks to improve Iraq’s electricity issues by recovering flared gas, as well as building a seawater treatment plant to be used instead of fresh water in providing pressure maintenance to increase oil production.
“Furthermore, TotalEnergies will develop a 1 GW solar power plant to supply electricity to the Basra regional grid. In agreement with Iraqi authorities, TotalEnergies will invite the Saudi company ACWA Power to join this solar project,” the statement added.
The company said the agreement comes after four rounds of talks between TotalEnergies CEO Patrick Pouyanne and Iraqi Prime Minister Mohammed Shia’ al-Sudani.
Iraq is still one of the world’s largest gas flaring countries. The flaring process is when oil wells burn the excess gas they can't store or use, and is a convenient way to deal with the waste product known as associated petroleum gas, however the process is among the main reasons for global climate change.
The country is the fifth-most vulnerable nation in the world to the effects of climate change, including water and food insecurity.
Iraq also suffers from chronic electricity shortages, especially felt when summer temperatures reach scorching levels of over 50 degrees Celsius. The high temperatures subsequently lead citizens to consume very high amounts of power.
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