Iraq, TotalEnergies talks reach advanced stage

Talks between Iraq and TotalEnergies about a $27bn energy deal "have reached advanced stages," according to the Mideast Gulf country's oil minister Hayan Abdulghani.

"We will activate the deal very soon," Abdulghani said on 19 March at the Baghdad Dialogue International Conference, which coincides with the 20-year anniversary of the US invasion of Iraq.

The deal, which comprises four oil, gas and renewables project and that was signed in September 2021, has been entangled in Iraq's fragmented politics as well as a dispute over the shareholding structure of the agreement. Iraq's oil ministry said in February it had "some problems" finalising the terms of the deal, with Iraq insisting on taking a 40pc share in the projects rather than the 25-30pc envisioned by TotalEnergies.

Asked if the issue of Iraq's share was resolved, Abdel-Ghani said: "It's not the time to discuss the shares and we will announce them when an agreement is reached."

Iraq has previously flagged that the deal with TotalEnergies will enable the capture of more gas that is currently flared. Abdulghani pointed out that only 56pc of the gas production in Iraq is utilised and the rest flared, and that most of output is associated natural gas.

"The quantities of gas utilised does not exceed 1.5 trillion ft³, but the possibility of increasing it to higher rates is there," he said.

He said there is an ambitious plan to utilise the gas that is currently being flared, especially in the southern fields.

"Within the five-year plan of the oil ministry, there will be a large investment in gas which will lead to Baghdad halting its imports of Iranian gas," he said.

Separately, Abdulghani said Iraq remains committed to complying until end of 2023 with its 220,000 b/d oil output cuts, in line with the Opec+ agreement, even though it has plans to invest in oil and gas projects to raise output capacity.

"The country is ready to increase production if required to do so by the [Opec+] alliance," he said, noting that the government "obliged some oil companies operating in the south to cut production to come in line with the Opec+ agreed quotas."

By Bachar Halabi