The French company TotalEnergies signed a $27 billion contract with Iraq on Sunday to invest in the country's gas, oil, and solar energy industries. The deal was announced by Iraqi Oil Minister Ihsan Abdul-Jabbar Ismail during a joint press conference with TotalEnergies CEO, Patrick Pouyanne, in Baghdad.
Ismail said that the deal aims to reduce Iraq's reliance on fossil fuel. "This is the largest investment by a Western company in Iraq," he added. "Implementing these projects is the challenge we now face."
Although the French group has not yet confirmed the value of the investment, company officials said that the plan is to invest an initial $10 billion in infrastructure. This will be followed by a second round of investments totalling $17 billion.
Sources in the Iraqi Ministry of Oil explained that the contract with the French group covers four projects: the installation of a solar energy farm in Artawi which will produce 1,000 megawatts of electricity, the equivalent of a nuclear reactor; piping seawater from the Gulf to southern Iraqi oil fields, where water is used to extract oil from subterranean deposits; an increase in production from the Artawi oilfield near the southern port of Basra from 85,000 barrels per day to 210,000 bpd; and the construction of a complex to exploit production from the sector's gas fields. Rather than flaring or burning off the excess, the plan is to recover it for use in generating electricity.
Iraq currently produces 16,000 megawatts of electricity, which is much less than its estimated need of 24,000 megawatts. The demand for electricity increases to 30,000 megawatts in the summer season when temperatures exceed 50 degrees Celsius and air conditioning units are used much more than usual.