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France's TotalEnergies signs $27bn oil, gas, solar deal in Iraq

06 September 2021 16:35 (UTC +04:00)

French giant TotalEnergies signed a $27-billion contract to invest in oil, gas, and solar production in Iraq Sunday, as the country faces an acute energy crisis, APA reports citing France24.

The announcement of the deal, supposed in part to reduce Iraq's reliance on fossil fuels, came as Oil Minister Ihsan Ismail signed the contract at a Baghdad ceremony with TotalEnergies chief Patrick Pouyanne.

TotalEnergies has not directly confirmed to AFP the value or duration of the contract, which was signed after months of negotiations and several visits by Pouyanne.

But the French major plans initially to invest $10 billion in infrastructure, the proceeds of which will then allow a second round of investments of $17 billion, the officials said.

"This is the largest investment in Iraq by a Western company," Ismail said. "Implementing these projects is the challenge we face now."

"Happy to be in Basra where I visited gas and oil fields," Pouyanne tweeted in January. "Reducing flaring and increasing gas production is a priority for Iraq as well as for Total. Let's work together!"

Iraq has immense reserves of oil and gas.

Despite being the number two producer in the Organization of the Petroleum Exporting Countries, it is experiencing an acute energy crisis and chronic blackouts that fuel social discontent.

Officials justify the lack of investment and the dilapidated state of its energy network by citing falling oil prices, which represent more than 90 percent of state revenue.