SULAIMANI (ESTA) — A $27-billion deal between Iraq and France’s Total has stalled amid disputes over terms and risks being scrapped by the country’s new government, Reuters reported on Monday.
Total agreed last year to invest in four oil, gas and renewables projects in Basra province over 25 years.
The two sides signed the deal in September 2021, following a visit from French President Emmanuel Macron.
Iraq’s oil ministry said in January that the deal would go into its “execution phase” during the first quarter of 2022.
The oil minister did not have agreement on the deal’s financial details with all the government departments that needed to approve it, Reuters cited three Iraqi oil ministry and industry sources as saying.
The deal “has been mired in disputes ever since”, they told Reuters.
The deal now needs approval from a new Iraqi cabinet, including new oil and finance ministers.
Iraq’s oil ministry told Reuters it expected the TotalEnergies deal to complete from then.
The company said it was progressing towards closing the deal, according to Reuters. It, however, said: “The agreements remain subject to conditions to be met and lifted by both sides.”
The terms have also raised concerns from Iraqi politicians, and according to sources close to the deal are unprecedented for Iraq.
A group of Shia lawmakers wrote a letter to the oil ministry in January demanding details of the deal and asking why it was signed without competition and transparency, Reuters said.
The Council of Representatives could force the oil ministry to review or scrap the deal.
Under the deal, Total will build for giant energy projects in southern Iraq.
Iraqi oil minister Ihsan Abdul Jabbar said in October that the first phase would include a $3 billion investment by the French group in a project to inject sea water into oilfields to enhance crude recovery.
The French company would also provide $2 billion to build a processing plant for gas produced at the southern fields of West Qurna 2, Majnoon, Artawi, Tuba and Luhais, he added.
It is expected to produce 300 million cubic feet of gas per day (mcf/d) and double that after a second phase of development, the minister said.
The other two projects are a solar power plant and one to increase crude output from the Artawi oilfield.
Total would help to boost output from the Artawi oilfield to 210,000 barrels per day of oil (bpd) from 85,000 bpd now, an oil ministry statement said.
