A massive $27 billion four-part deal was inked recently between French company TotalEnergies and the Iraqi Federal Government, and will go into effect in the next four weeks. The massive deal is crucial to enable Iraq to increase its oil output from 4.5 million bpd to 13 million bpd in the span of five years. It’ll also free Iraq from relying on Iranian gas and electricity imports. As for the west, the deal is important, as it’ll ensure the discovery of new oil and gas reserves in Iraq, which could compensate for missing Russian supplies. It’ll also reaffirm western influence in the region in the face of increasing Chinese and Russian influence. This four-part deal from TotalEnergies is a huge deal indeed.
The deal was delayed long enough from 2021 until now, and Iraq’s role in this delay wasn’t a part of a geopolitical strategy from any side that wants to dominate the world or anything like that, but rather it was simply a dispute on payments to certain Iraqi officials, especially as Iraqi was still rebranding its Iraqi National Oil Company, which is considered one of the most corrupt companies worldwide, with TotalEnergies refusing to take part in many of the shenanigans taking place in this organization, and thankfully, the organization was outright abolished by a count order in Iraq last October.
The current deal states the Iraqi government will take 30% of the major contract, with Total Energies gaining 45%, while Qatar Energy gains 25%.
According to OilPrice sources, Iraq was encouraged to do the deal by Chinese and Russian elements, especially after Iranian-Saudi relations were tentatively resumed again with Chinese patronage.
China indeed will benefit greatly from the deal, as it seeks a reliable and cheap source of energy to fuel its massive expansion and overtake the US and the world’s top economic and political super power by 2030.
A major part of the new deal is extending and completing the project of processing sea water from the Persian gulf and transferring it through pipelines to oil production facilities to maintain pressure in oil pockets and improve the longevity and productivity of oil fields.
Another major aspect of the deal is collecting and refining natural gas accompanying the process, which is currently burned in five major oil fiends in southern Iraq, and such efforts will help Iraq cut down its Iranian gas imports.
TotalEnergies already has extended experience working all over Iraq, and own major stakes in oil fields in the country, and TotalEnergies is expected to improve the productivity of several fields by two to three times, in addition to building anew solar station with power estimated at 1000 megawatts.