TotalEnergies to add Qatar Energy, BOC as partners in Iraqi projects part of $27 bil deal

TotalEnergies has agreed to grant state-owned Basrah Oil Co. and QatarEnergy stakes in two projects in Iraq that are part of a $27 billion deal following months of delays as OPEC's second-biggest producer seeks to attract much needed foreign investment to its energy industry.

Basrah Oil Co. will have a 30% stake and QatarEnergy a 25% interest, with TotalEnergies holding the remainder, the French company said in an April 5 statement.

QatarEnergy confirmed the agreement in a separate press release, while Iraq's cabinet approved in an April 4 meeting the revision of its stake to 30% from 40%.

The three companies will share a $10 billion investment into the Gas Growth Integrated Project.

The Gas Growth Integrated Project includes capturing associated gas, which is currently flared, from three oil fields for use in power generation, and building a seawater treatment plant to provide water injection to boost oil production as an alternative to using fresh water.

TotalEnergies signed the $27 billion deal in September 2021, which has been bogged down by differences over the size of Iraq's stake in the projects, which was initially supposed to be 40%, and other technical issues.

Second-worst flaring nation

Iraq mainly produces associated gas pumped with oil, which is subject to OPEC+ oil production quota restrictions.

The country also burns most of its associated gas, making it the world's second-worst flaring nation after Russia, according to the World Bank.

Iraq is trying to lower its reliance on Iranian electricity and gas imports, which are subject to sanctions. Iraq receives waivers from the US to import Iranian energy without financial repercussions.

Iraq also needs seawater injection into its oil fields to maintain pressure, particularly in the giant southern ones operated by international oil companies.

TotalEnergies will also work with Saudi Arabia's renewables firm ACWA Power to develop a 1 GW solar power plant to supply electricity to the power grid of the energy-rich southern governorate of Basrah.