The Oil Ministry has said that Iraq has signed a heads-of-agreement deal with France’s Total spanning four projects involving natural gas, solar energy and seawater reprocessing.
Iraq’s Oil Minister Ihsan Abul Jabbar said in a ministry statement that Total will make a ‘multibillion-dollar’ investment and the four initial deals will be submitted to the cabinet for final approval.
The agreement was signed during a visit by Total CEO Patrick Pouyanne, according to the statement.
No exact figure was given for the value of the deal.
Prior to being signed, Abdul Jabbar said the deal would be worth $7bn.
Under the agreement, Total will build a facility to treat associated natural gas from five southern oil fields.
- West Qurna 2
- Artawi (also known as Ratawi)
According to Iraq’s Oil Ministry, this is the most important of the four projects that Total will execute under the new agreement.
The facility is expected to process 300 million cubic feet of gas a day (Mcf) and double that after the second phase of development, according to Iraq’s Oil Ministry.
Currently, large volumes of gas are flared from these fields, causing significant environmental damage.
Collecting and processing this gas will generate increased hydrocarbon revenues and reduce environmental damage.
The planned central gas complex will be located in Artawi.
Abdul Jabbar did not provide a timeline for project execution.
The Oil Ministry said the gas processing project will supply Iraq’s national gas network to generate electric power and increase the production of gas products, including liquefied petroleum gas (LPG) and condensate.
The other three projects are:
- The $4bn Common Seawater Supply Project (CSSP)
- A project to develop the Artawi field
- The establishment of a 1GW solar energy project for the Ministry of Electricity
Abdul Jabbar said all four projects have had their ‘final memoranda signed’ and the scope of technical and commercial work agreed on.
He also said that Total and the Oil Ministry had been in talks regarding these projects since October 2020.
He said technical, commercial, economic and financial matters were discussed for the four projects during the talks and that Total had committed to pumping billions of dollars in order to realise the projects.
The CSSP has seen significant delays since it was first announced in 2011 and has stalled over recent years amid financial issues.
In January, MEED revealed that Iraq’s state-owned Basra Oil Company (BOC) had revived the dormant project, asking contractors to submit commercial bids for the main pipeline package, estimated to be worth about $1.5bn.
The Oil Ministry said that Total had agreed to ensure that the CSSP would have the capacity to transport 2.5 million barrels of water a day (Mbpd) once the initial phase had been completed.
It said that the project was ‘one of the most important projects with regard to sustaining production in the oil fields’.
Under the agreement, the Artawi field will be developed by Total so that production reaches 200,000 barrels a day (bpd).
The current production capacity is 60,000bpd.
This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.