France's TotalEnergies today signed a $27bn agreement with the Iraqi government to invest in four troubled energy projects that the country has struggled to implement for several years.
These include the common seawater supply project (CSSP), which Iraq has been trying to progress for over a decade. TotalEnergies will develop a 7.5mn b/d facility to provide desalinated seawater for injection into oil fields, which will be vital to maintaining and ultimately expanding production at mature fields in southern Iraq.
TotalEnergies will also boost production at the 85,000 b/d Ratawi oil field in Basrah, lifting capacity by 150pc to a plateau of 210,000 b/d. Alongside this will be a central processing facility to handle captured associated gas from five oil fields in Basra: Ratawi, West Qurna 2, Majnoon, Luhais and Tuba. These will process up to 600mn ft³/d, split equally over two phases, producing around 12,000 b/d of condensate and 3,000 t/d of LPG.
The final part of the deal covers a 1,000MW solar power plant which Iraq says will produce electricity at less than 45pc of the cost of its current generation capacity. According to the initial agreement signed by TotalEnergies with Iraq in March, the first 500MW phase is due online in just over a year.
The country has been plunged into extended power outages, sparking sporadic protests and the resignation of the minister of electricity in May. The main reason for the crisis is the failure of the country's generation and transmission infrastructure to meet rising demand, making the solar power deal even more important.
Iraq said it envisages a profit of $95bn on the investment over the life of the contract, assuming an oil price of $50/bl. But it could still face delays. The signing ceremony comes ahead of Iraq's parliamentary elections in October, which could bring in a new government in Baghdad.
