With 27 billion dollars.. Mysterious fate of an investment deal between Iraq and Total

An investment deal worth 27 billion dollars between Iraq and the French multinational company, Total, is facing disputes over the percentage of ownership of the project between the two sides.

Iraq wants to raise the current production rates of 4.4 million barrels per day, and to modernize production lines that have become obsolete due to the repercussions of internal wars over the past years, and companies' fear of investing there.

Total agreement for $27 billion oil in Iraq

On September 26, 2021, the Iraqi Ministry of Oil announced that the French oil giant, Total, will build four giant energy projects in the south of the country, at a value of $27 billion, according to an agreement signed in Baghdad at the time, according to Al-Bayan newspaper

At the time, Total said that the company would start with an initial investment of $10 billion, making it one of the largest oil investors in Iraq, noting that the engineering work would start by the end of this year.

Establishing complexes and gas processing units

The Iraqi Ministry of Oil stated that the French company Total will implement 4 projects, including the establishment of complexes and units to treat and invest associated gas, in two phases with a capacity of 600 million standard cubic feet, in addition to the project to develop the Artawi oil field in the south of the country, according to the statement.

According to Al-Sharq Al-Awsat newspaper, on February 14, 2023, the giant deal between Total and Iraq faltered, due to political differences and the division of project production between the two parties.

Terms of agreement concerns

The terms of the agreement between Total and the Iraqi Oil Company, which had not been announced or published before, raised the concerns of Iraqi politicians, and sources close to the deal said that they are unprecedented conditions for Iraq, according to Al-Sharq Al-Awsat newspaper.

The agreement is not done

On Sunday, March 19, 2023, Iraqi Oil Minister Hayan Abdul-Ghani said that the talks that Iraq is holding with the French energy giant Total Energies to resolve the sticking points in a $27 billion delayed investment deal have reached advanced stages, according to Reuters.

In response to a question about whether the issue of Iraq's share in the project has been resolved, Abdul-Ghani said that the time is not appropriate to discuss the matter, and the shares will be announced when an agreement is reached.

Total did not come up with a solution

Despite the government statements, the CEO of the French oil company Total Energies, Patrick Pouyanne, said, in statements published on March 22, 2023, that no solution had been reached regarding the stalled agreement between Iraq and the company regarding an energy project worth $27 billion. 

Boyan explained that the agreement was subjected to tests when elections were held and the government changed after signing it. Sources said that the new Iraqi government, which was elected in October 2022, insists that the country obtain a 40% stake in the project, while Total wants to give the government only 30%, which is a major point of contention.

115 billion dollars achieved by Iraq from oil

Iraq was one of the beneficiaries of the high oil price, and the country achieved more than $115 billion from exporting crude oil for the year 2022, with a quantity of one billion and 209 million barrels, according to preliminary statistics, according to Agence France-Presse on January 3, 2023.

As for the daily export rate, it amounted to 3 million and 320 thousand barrels, and Iraq achieved these revenues in light of the high price of a barrel of oil affected by the war in Ukraine, and with the countries of the OPEC Plus alliance keeping their production quotas as they are at the time.