TotalEnergies Splurges $27 Billion On Iraqi Oil And Solar Projects

By Irina Slav - Sep 06, 2021, 10:30 AM CDT

TotalEnergies has inked a deal with the Iraqi government to invest $27 billion in the country's energy industry over 15 years, the Wall Street Journal has reported, citing unnamed sources familiar with the deal.

According to the WSJ's sources, among the projects considered would be a seawater injection project aimed at boosting the rate of oil recovery at several fields in southern Iraq as well as a solar farm project. The initial sum TotalEnergies will invest in Iraq is $10 billion.

These projects should help improve Iraq's highly unreliable electricity supply, which is plagued by shortages that cause unrest among the population. It could also reduce its dependence on imports of natural gas from neighbor Iran, for which Baghdad has several times come under fire from the United States.

Currently, Iraq imports a third of the electricity and natural gas that it consumes from Iran and has accumulated debts of some $6 billion for the energy it purchased.

"This is the largest investment in Iraq by a Western company," said Iraqi oil minister Ihsan Abdul Jabbar Ismail, as quoted by the AFP. "Implementing these projects is the challenge we face now."

According to the AFP, the collaboration will see the output from the Artawi field increase from 85,000 bpd to as much as 210,000 bpd. It will also reduce flaring and direct the gas that would have otherwise been flared to electricity production.

The gas recovery project will see associated gas collected from five Basra oil fields, including Ratawi, West Qurna 2, Majnoon, Luhais, and Tuba, and processed at a rate of 600 million cu ft daily, Argus reported. The result will be some 12,000 bpd of condensate and 3,000 tons daily of liquid petroleum gas.

As for the solar project, the AFP cited an unnamed Iraqi source who said the plans are to build a 1-GW solar farm at the Artawi field. According to the Iraqi government, electricity produced at solar farms "costs 45 percent less than that produced by traditional power stations".

By Irina Slav for Oilprice.com