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Iraq's share in the projects impede the agreement with the French oil giant
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2023-02-02 12:36
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Shafaq News / Reuters reported, on Thursday, that Iraq and the French oil giant Total Energies have not yet reached an agreement to settle major points stuck in a long-delayed $27 billion energy agreement that Baghdad hopes will revive foreign investment in the country.
The agency stated that the two parties signed the agreement in 2021, and it provides for the establishment of "Total Energies" four oil, gas and renewable energy projects, with initial investments of ten billion dollars, in southern Iraq over a period of 25 years.
Sources told Reuters early last year that the agreement witnessed several setbacks amid disagreements between Iraqi politicians over its terms.
According to four Iraqi sources, "Total Energies" asked its foreign employees to leave Iraq and its local employees to work from home, while it finds it difficult to settle its differences with Baghdad.
Three sources said that Iraq's demand for a 40% stake in the group of projects is a major sticking point in the agreement, while the French company wants a majority stake.
A spokesman for the Iraqi Oil Ministry, Asim Jihad, told Reuters that "another space has been given to continue the dialogue to reach a solution that satisfies the parties concerned."
He added that the talks could take a few months.
The delay comes as a blow to Baghdad's efforts to stop the exit of major oil companies from Iraq.
Both Exxon Mobil and BP have reduced their operations in Iraq in recent years, which has contributed to the slowdown in Iraqi oil production.
And increased Iraqi oil production capacity to about five million barrels per day from three million in the past few years.
The delay also marks a setback for France's efforts to boost its presence in the Middle East.
Iraq and France signed a strategic partnership during a visit by newly-appointed Iraqi Prime Minister Mohammed Al-Sudani to Paris last week, during which cooperation on energy issues was discussed, including with Total Energies.
A source said that Al-Sudani, who took office last October, met with the CEO of "Total Energies" Patrick Pouyanne, but the dispute over Iraq's share in the project cast a dark shadow over the talks.
Two sources pointed out that Baghdad could not cancel the previous government's decision to demand a partnership of 40%, because that would be tantamount to a waiver of Iraq's rights.
Three sources in Iraq told Reuters that the withdrawal of Total Energies employees from Iraq is not strange.
"We do not know whether this dismissal is real or if it is a negotiating pressure card," Mustafa Jabbar Sanad, a member of the Iraqi parliament, tweeted on January 30.
Iraq is still optimistic about the completion of the agreement, as it believes that it is only a matter of time.
Jihad said that the two sides affirmed "their desire to move forward towards achieving the agreement in the interest of both parties. There is a space of time that may extend for a few months.. The government and the ministry support moving forward with the agreement.. We have no problems with Total and our relationship is good and growing."
Meanwhile, the head of the Iraqi Basra Oil Company told Reuters on Wednesday that he expected Qatar to acquire a stake ranging between 20 and 25 percent in the project and that the agreement would be activated within three months.
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[You must be registered and logged in to see this image.]
2023-02-02 12:36
Share
Font
Shafaq News / Reuters reported, on Thursday, that Iraq and the French oil giant Total Energies have not yet reached an agreement to settle major points stuck in a long-delayed $27 billion energy agreement that Baghdad hopes will revive foreign investment in the country.
The agency stated that the two parties signed the agreement in 2021, and it provides for the establishment of "Total Energies" four oil, gas and renewable energy projects, with initial investments of ten billion dollars, in southern Iraq over a period of 25 years.
Sources told Reuters early last year that the agreement witnessed several setbacks amid disagreements between Iraqi politicians over its terms.
According to four Iraqi sources, "Total Energies" asked its foreign employees to leave Iraq and its local employees to work from home, while it finds it difficult to settle its differences with Baghdad.
Three sources said that Iraq's demand for a 40% stake in the group of projects is a major sticking point in the agreement, while the French company wants a majority stake.
A spokesman for the Iraqi Oil Ministry, Asim Jihad, told Reuters that "another space has been given to continue the dialogue to reach a solution that satisfies the parties concerned."
He added that the talks could take a few months.
The delay comes as a blow to Baghdad's efforts to stop the exit of major oil companies from Iraq.
Both Exxon Mobil and BP have reduced their operations in Iraq in recent years, which has contributed to the slowdown in Iraqi oil production.
And increased Iraqi oil production capacity to about five million barrels per day from three million in the past few years.
The delay also marks a setback for France's efforts to boost its presence in the Middle East.
Iraq and France signed a strategic partnership during a visit by newly-appointed Iraqi Prime Minister Mohammed Al-Sudani to Paris last week, during which cooperation on energy issues was discussed, including with Total Energies.
A source said that Al-Sudani, who took office last October, met with the CEO of "Total Energies" Patrick Pouyanne, but the dispute over Iraq's share in the project cast a dark shadow over the talks.
Two sources pointed out that Baghdad could not cancel the previous government's decision to demand a partnership of 40%, because that would be tantamount to a waiver of Iraq's rights.
Three sources in Iraq told Reuters that the withdrawal of Total Energies employees from Iraq is not strange.
"We do not know whether this dismissal is real or if it is a negotiating pressure card," Mustafa Jabbar Sanad, a member of the Iraqi parliament, tweeted on January 30.
Iraq is still optimistic about the completion of the agreement, as it believes that it is only a matter of time.
Jihad said that the two sides affirmed "their desire to move forward towards achieving the agreement in the interest of both parties. There is a space of time that may extend for a few months.. The government and the ministry support moving forward with the agreement.. We have no problems with Total and our relationship is good and growing."
Meanwhile, the head of the Iraqi Basra Oil Company told Reuters on Wednesday that he expected Qatar to acquire a stake ranging between 20 and 25 percent in the project and that the agreement would be activated within three months.
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