Total, a French energy goliath, has authenticated mega-value contracts with Iraq to develop natural gas, water projects, and oil fields which will be essential for the oil-abundant nation to sustain crude production. The contract was valued at a whopping $27 billion.
The deals were signed under the presence of Prime Minister, Mustafa al-Kadhimi, stated a source from the Ministry of Oil.
Total collaborated with the Ministry of Oil for the advancement of the Ratawi Oil Field in southern Iraq. The hub is a gas processing field that possesses natural gas from 5 southern oil fields. This project is significant for the treatment and injection of the Gulf seawater into reservoirs that are dedicated to upholding the oil production levels.
The deal with the French company is of utmost ambition and profitable character, signed by the Iraqi oil goliath in years. The deal comes to fruition as several international oil firms have taken strategic steps to leave the Iraqi oil sector.
Apart from the previously mentioned projects, the Ministry of Electricity has authenticated a fourth project to construct a 1,000-megawatt solar power plant.
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Total will provide Iraq with its urgent needs of developing localized gas resources to meet the electricity demands that usually rise during the summer months. The nation is abundantly reliant on Iranian electricity and gas imports, which have been lop-sided owing to the high demand surge and outstanding payments in Iran.
Oil Minister, Ihsan Abdul-Jabbar Ismail, stated that he was targeting increasing Iraq’s gas volume by 85 million cubic meters by the year 2025. The advancement of the gas processing center would enable Iraq to bag a closer position to that target. Currently, Iraq imports 56.6 million cubic meters of natural gas to fulfill the domestic needs of the country.
The Total project necessitates the construction of a gas complex that is proficient in processing and separating the natural gas linked with petroleum that is procured from the West Qurna 2, Ratawi, Tuba, Majnoon, and Luhais oil fields.
Presently, Iraq is devoid of the capacity to procure and separate natural gas from petroleum. It is burned off in the atmosphere instead. Specialists have stated that the inefficiency in capturing natural gas has caused Iraq to waste millions of dollars in revenue. However, procurement continues to be the biggest necessity for Iraqi geography owing to its surge in domestic electricity needs.
Industry officials in the Oil Ministry have claimed that seawater development was a crucial factor in developing the welfare of the Iraqi oil industry. The French company and Iraq have also signed a deal that will facilitate the development of the Gulf seawater.
The oil industry books 90% of the state’s revenue. To maintain the current production rate and achieve future goals, the field is reinjected with water to maintain pressure. Hence, Total’s deal comes as a beacon of light to safeguard this majority of the state’s revenue.
The Total deal was encouraged by Prime Mister, Mustafa al-Kadhimi, before the national elections which will be held in October.
The Iraqi contracts with Total resonated with the latter’s other multi-project deal which has been in negotiation for several years with ExxonMobil, a US oil mogul. However, years of unfruitful discussions have caused the deal to fall through.
Total’s deal in Iraq arrives at a time when several other existing oil companies brainstorm to exit from the Iraqi geography. ExxonMobil has announced in 2021 that it will be selling off its shares from the West Qurna 1 oil field. The oil minister also stated that British Petroleum will hive-off the expansion of the Rumaila oil field, which boasts itself as the country’s largest oil field.
