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[size=39]A $27 billion contract between Baghdad and France's Total Energies
AFP
06 September 2021[/size]
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AFP
06 September 2021[/size]
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On Sunday, Iraq signed a $27 billion contract with the French group "Total Energies" to invest in gas, oil and solar energy, and aims to reduce dependence on fossil energy in a country suffering from a chronic energy crisis.
The total value of this huge contract is "27 billion dollars", according to what Minister Ihsan Abdul-Jabbar Ismail announced, in a press conference, on Sunday, in which the CEO of the company, Patrick Pouyanneh, also participated, at the conclusion of the signing ceremony in Baghdad.
The minister added that this is "the largest investment by a Western company in Iraq... and the challenge now is the implementation of projects," explaining that "a third of the investment funds will be spent during the next seven years."
The French group contacted by AFP in Paris did not confirm after this investment or its value and duration, but the executive director of the French group confirmed that "the initial capital value that will be invested is ten billion dollars and amounts to 27 billion in profits and benefits resulting from the projects."
"I am glad that I am in Basra, where I visited gas and oil fields," Pouyanneh wrote in a tweet in January, adding that "reducing gas flaring and raising its production is a priority for Iraq as well as for Total. Let's work together."
Iraq currently produces 16,000 megawatts of electricity, which is much less than its estimated need of 24,000 megawatts, which reaches 30,000 in the summer, while its population may double by 2050, which means an increase in its energy consumption, according to the United Nations.
The country experiences frequent power cuts, especially during the scorching summer when the temperature exceeds 50 degrees. Iraqi officials say that this is due to a lack of investment and the deterioration of the network with the drop in oil prices, which represents 90 percent of the country's revenues.
Sources in the ministry had told AFP that the contract with the French group is "one of the largest contracts in the Iraqi oil sector", and involves four axes.
One of the projects aims to develop the exploitation of solar energy, which is abundant in this country, which has a predominantly desert climate. According to the source, the project is supposed to provide the production of 1,000 megawatts, equivalent to the energy generated from a nuclear reactor, through solar energy, "at a cost that is 45 percent lower than the cost of energy production from current power plants," according to a statement by the Iraqi Prime Ministry.
The first axis includes "the extension of the sea water pipeline, which is important for the maintenance and production of the oil fields, and it supplies the oil fields with sea water", which is considered an essential factor in the extraction of oil.
The other project is "investment of gas from fields located outside the Basra Gas Company... with a total sum of 600 million standard cubic feet per day", which would "lead to a reduction in gas imports."
The third project includes developing the Artawi oil field in the south of the country and increasing production from 85,000 barrels per day to 210,000 barrels.
The sources said, "Iraq will not pay anything, as these are reimbursable costs, after operating the projects."
Iraq relies heavily on neighboring Iran, from which it provides a third of its gas and electricity needs. Baghdad owes Tehran $6 billion for energy supplies.
These projects are supposed to exploit and refining gas from fields located in the south of the country, consisting of natural gas that is currently burned in highly polluting flares, costing the country $2.5 billion each year, according to the World Bank.
Iraq contains huge reserves of gas and oil, as it is the second oil producer according to the Organization of Petroleum Exporting Countries (OPEC), but it is facing an acute and chronic energy crisis that fuels social anger.
The group, which was called "Total", is one of the five largest energy companies in the world, and has renamed itself "Total Energy" in reference to its diversification into investing in clean energy sources.
The group's business is still focused on oil and gas, but this year it announced its intention to allocate 20 percent of its investments in the field of electricity and renewable energy sources.
It has been present in Iraq since 1920 in the exploration and extraction of hydrocarbons, with contributions to production in the Halfaya fields in Maysan in the south. It is also among the investors in the Sarsanak field in the Kurdistan region. It also provides goods and services.
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The total value of this huge contract is "27 billion dollars", according to what Minister Ihsan Abdul-Jabbar Ismail announced, in a press conference, on Sunday, in which the CEO of the company, Patrick Pouyanneh, also participated, at the conclusion of the signing ceremony in Baghdad.
The minister added that this is "the largest investment by a Western company in Iraq... and the challenge now is the implementation of projects," explaining that "a third of the investment funds will be spent during the next seven years."
The French group contacted by AFP in Paris did not confirm after this investment or its value and duration, but the executive director of the French group confirmed that "the initial capital value that will be invested is ten billion dollars and amounts to 27 billion in profits and benefits resulting from the projects."
"I am glad that I am in Basra, where I visited gas and oil fields," Pouyanneh wrote in a tweet in January, adding that "reducing gas flaring and raising its production is a priority for Iraq as well as for Total. Let's work together."
Iraq currently produces 16,000 megawatts of electricity, which is much less than its estimated need of 24,000 megawatts, which reaches 30,000 in the summer, while its population may double by 2050, which means an increase in its energy consumption, according to the United Nations.
The country experiences frequent power cuts, especially during the scorching summer when the temperature exceeds 50 degrees. Iraqi officials say that this is due to a lack of investment and the deterioration of the network with the drop in oil prices, which represents 90 percent of the country's revenues.
Sources in the ministry had told AFP that the contract with the French group is "one of the largest contracts in the Iraqi oil sector", and involves four axes.
One of the projects aims to develop the exploitation of solar energy, which is abundant in this country, which has a predominantly desert climate. According to the source, the project is supposed to provide the production of 1,000 megawatts, equivalent to the energy generated from a nuclear reactor, through solar energy, "at a cost that is 45 percent lower than the cost of energy production from current power plants," according to a statement by the Iraqi Prime Ministry.
Huge precautions
In addition to this unprecedented and ambitious investment in the field of renewable energy, the Total-Baghdad agreement includes three projects in the fossil energy sector, whose production has declined due to deteriorating infrastructure and energy leakage during the extraction of oil and gas from underground.The first axis includes "the extension of the sea water pipeline, which is important for the maintenance and production of the oil fields, and it supplies the oil fields with sea water", which is considered an essential factor in the extraction of oil.
The other project is "investment of gas from fields located outside the Basra Gas Company... with a total sum of 600 million standard cubic feet per day", which would "lead to a reduction in gas imports."
The third project includes developing the Artawi oil field in the south of the country and increasing production from 85,000 barrels per day to 210,000 barrels.
The sources said, "Iraq will not pay anything, as these are reimbursable costs, after operating the projects."
Iraq relies heavily on neighboring Iran, from which it provides a third of its gas and electricity needs. Baghdad owes Tehran $6 billion for energy supplies.
These projects are supposed to exploit and refining gas from fields located in the south of the country, consisting of natural gas that is currently burned in highly polluting flares, costing the country $2.5 billion each year, according to the World Bank.
Iraq contains huge reserves of gas and oil, as it is the second oil producer according to the Organization of Petroleum Exporting Countries (OPEC), but it is facing an acute and chronic energy crisis that fuels social anger.
The group, which was called "Total", is one of the five largest energy companies in the world, and has renamed itself "Total Energy" in reference to its diversification into investing in clean energy sources.
The group's business is still focused on oil and gas, but this year it announced its intention to allocate 20 percent of its investments in the field of electricity and renewable energy sources.
It has been present in Iraq since 1920 in the exploration and extraction of hydrocarbons, with contributions to production in the Halfaya fields in Maysan in the south. It is also among the investors in the Sarsanak field in the Kurdistan region. It also provides goods and services.
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