Baghdad: Total, the French energy giant, signed a huge contract worth 27 billion dollars with Iraq to develop natural gas fields and oil fields. Officials claimed Monday that the project will allow the oil-rich country to continue its crude oil production. Key.
According to the Ministry of Petroleum statement, the deals were made with Prime Minister Mustafa al-Kadhimi.
Total and the Ministry have signed a contract for the development of the Latavi oilfield in southern Iraq. This is a natural-gas processing center that extracts natural gas from five southerly oil fields. It also serves as a processing center to process Gulf seawater and inject it into oil reservoirs to maintain high oil production.
The Ministry of Electricity signed the fourth project to construct a 1,000 MW solar power station.
This is the most ambitious and profitable agreement that an oil giant has ever signed in Iraq. The agreement was also signed by other international oil companies.
Total did not issue a statement immediately.
Iraq must develop its natural gas resources locally to supply electricity during peak summer periods. The country is heavily dependent on Iran’s imports of natural gas and electricity. Due to unpaid payments and Iran’s high domestic demand, imports have been irregular in recent months.
Petroleum Minister Ihsan AbdulJabbar Ismail stated in June that his goal is for Iraq to have a natural gas production capacity of 3 billion cubic feet per year by 2025. This goal will be achieved by developing natural gas processing facilities. Iraq currently imports 2 million cubic meters of natural gas to meet domestic demand.
The project calls for the construction a natural gas complex that can extract and process natural gas related oil from the Ratawi (West Qurna 2), Majnoon 2, Tuba and Luhais areas. The current method of capturing this gas in Iraq is not available and it is being burnt in the atmosphere. Experts claim that Iraq isn’t effectively capturing the gas, and it is losing millions of dollars in revenues. After being processed, the gas can now be transported to the power plants to provide household electricity.
Iraq stated it intends to completely eliminate natural gas combustion within the next two-three years. According to the World Bank, Iraq consumes 16 billion cubic meters of natural gases every day.
Total’s contract with Total is another multi-project deal, which was negotiated for many years with ExxonMobil, the US oil giant. After years of difficult negotiations, the deal fell apart.
Total also occurred at a time other oil companies were looking to leave Iraq. Exxon Mobil has announced that it will sell its stake at the West Qurna 1 oilfield. The Minister of Petroleum stated that BP would divest from the development of Rumaila, the largest oil field in the country.