Iraq and Total expect to finalize a contract by July to implement one or more dual-energy megaprojects to ramp up gas production, end flaring, and produce electricity from solar energy.
Iraq’s oil minister, Ihsan Abdul Jabbar, gave an update on the negotiations with Total in an interview 27 March with the Arabic-language news outlet, AsharqNews.
News that Iraq was speaking with Total was first reported in October and formalized in a memorandum of understanding, signed in January by Abdul Jabbar and Total CEO Patrick Pouyanné
The US is pressuring Iraq to produce more gas to reduce its dependence on Iran for gas and electricity imports. Iraq has received waivers to continue to import Iranian energy since the US imposed sanctions on Tehran in 2018, but these waivers are temporary.
Iraq’s problem is that most of the gas it produces is associated gas from produced oil, and that associated gas is currently being flared. Iraq is second only to Russia in gas flaring, having burned nearly 18 Bcm (632 Bcf) in 2019, according to a World Bank study published in July 2020.
Iraq plans to capture an additional 1.2 Bcf/D of flared gas by the end of 2023, the deputy oil minister said in October, as the country attempts to meet rising demand for gas to produce electricity and lower its carbon emissions, S&P Global reported.
This is where the partnership with Total, and perhaps other majors as well, comes into play.
“The agreement is giant, and the volume of the investment exceeds $7 billion,” the oil minister said of the Total talks in the AsharqNews interview. Reuters reported that Abdul Jabbar said conditions, including political and administrative for the economic model that protects the rights of both parties, have already been agreed.
In the first stage of the Total deal, Iraq is expected to focus on low-carbon solutions to capture all its flare gas and to harness the sun to produce 1 GW of solar power.
In earlier press statements, Iraq’s oil minister said it plans to build seven solar electrical power-generating stations across the country. Total is positioned to handle solar megaprojects, having proven itself in places like South Africa, for example, where Total’s “SunPower” plant in Prieska is one of Africa’s largest ground-mounted photovoltaic solar power plants.
In terms of its existing Iraqi assets, Total holds a 22.5% interest in the Halfaya oil field in Missan province in southern Iraq. It also owns an 18% stake in the Sarsang exploration block located in the northern semiautonomous Kurdish region, according to Total’s website.
Iraq’s oil ministry has said it wants to develop two gas fields, Mansuriya and Akkaz, with the help of international oil companies, and in October it opened a new licensing round on the 4.5-Tcf Mansuriya gas field.
According to press reports, Iraq’s oil ministry is in talks also with BP and with unspecified “Norwegian companies” regarding various parts of its infrastructure development strategy.
