September 6, 2021
Iraq on Sunday finalized a $27 billion dollar investment deal with the French energy giant Total in what could amount to less reliance on Iran for natural gas and electricity supplies.
The deal was agreed on in March and was inked in the presence of Iraq’s prime minister Moustafa al-Kadhimi in Baghdad yesterday. If the four projects in the deal go forward without any political or security disruptions in the future, this would be Iraq’s largest foreign investment deal aimed at developing the energy sector.
Iraq is dependent on Iran for more than 30 percent of its power generation, while Iran itself faces serious shortages.
Total will invest an initial $10 to develop infrastructure and then $17 billion to complete a natural gas extraction, transfer of sea water for oil extraction, solar energy and to increase production in a major oil field.
Total had a $5 billion deal with Iran in 2016 for developing gas fields in the Persian Gulf but had to withdraw from the agreement when it became clear the United States was intending to withdraw from the 2015 nuclear agreement and impose sanctions on Tehran.
The Iraqi cabinet, which is largely made up of technocrats has approved the deal with Total, but it should prove its resilience over time with Iran’s influence in parliament, especially if the current prime minister leaves office before Total completes the projects.