The Government of Iraq and French oil giant TotalEnergies have signed a long-awaited mega-energy agreement involving four projects worth an estimated $27bn (€24.64bn). The deal aims to increase oil production as well as boost Iraq’s capacity to use gas and renewables.

The signing for the agreement, which is the largest foreign investment in Iraq’s history, took place on 10 July between TotalEnergies CEO Patrick Pouyanne and Iraqi Oil Minister Hayan Abdel Ghani in Baghdad.

Under the agreement, TotalEnergies will take a 45% in the Gas Growth Integrated Project (GGIP), while the state-owned Basrah Oil Company will take a 30% stake. QatarEnergy will take the remaining 25% stake in the GGIP.

The GGIP seeks to improve Iraq’s electricity supply by recovering flared gas at three oilfields to supply gas at power plants, in a bid to reduce the country’s import bill.

The GGIP also involves the construction of a seawater treatment plant to provide water to increase regional oil production, as an alternative to fresh water from Iraq’s rivers and marshes.

The transaction was originally agreed in 2021 but has faced several delays amid disagreement among Iraq lawmakers over specific terms. In April 2023, Total confirmed its stake in the agreement after negotiations with the Iraqi Government.

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The deal was widely viewed as a litmus test for Baghdad’s ability to attract hesitant foreign investors and companies.