US welcomes Iraq, TotalEnergies’ massive oil, gas and renewables deal

3:37 pm Tuesday, July 11th, 2023

By Kanishka Singh

WASHINGTON (Reuters) -The United States on Tuesday welcomed Iraq’s oil, gas and renewables deal with French oil major TotalEnergies, which was signed a day earlier.

Iraq and TotalEnergies on Monday signed a long-delayed $27 billion energy deal that aims to increase oil production and boost the country’s capacity to produce energy with four oil, gas and renewables projects.

“Formally signed this week, this massive deal, which will include participation from regional and American companies, is a major step towards both establishing Iraq’s energy self-sufficiency and meeting its climate goals,” White House national security adviser Jake Sullivan said in a statement.

The United States supports Iraq’s ongoing efforts “to enhance domestic resilience”, and diversify its energy supply, Sullivan said.

Initially signed in 2021, the deal had faced delays amid disputes between Iraqi politicians over the terms, but was finally closed in April when Iraq agreed to take a smaller than initially demanded stake in the project of 30%. TotalEnergies took a 45% stake and QatarEnergy holds the remaining 25%.

The project signed with TotalEnergies will improve Iraq’s energy security and the reliability of its electricity network, Sullivan added.

TotalEnergies Chairman and CEO Patrick Pouyanne signed the deal on Monday with Iraqi oil minister Hayan Abdel-Ghani. He said the project would break ground this summer and would see an investment of $10 billion over the next four years.

The project called the Gas Growth Integrated Project (GGIP) aims to improve the country’s electricity supply, including by recovering flared gas at three oilfields and using the gas to supply power plants, helping to reduce Iraq’s import bill.

Iraq hopes the project will attract fresh foreign investment into its energy sector that has not been forthcoming since a flurry of post U.S.-invasion deals over a decade ago.

(Reporting by Kanishka Singh and Rami Ayyub in Washington; Editing by Leslie Adler and Angus MacSwan)