French oil company Total signed an agreement with the Iraqi government in Baghdad, on Sunday, to build four giant energy projects in the south of the country, at a cost of $27 billion.
The Iraqi Oil Minister, Ihsan Abdul-Jabbar, stated that the French company will invest ten billion dollars in infrastructure, followed by a second payment of 17 billion dollars.
But Total said Monday in a statement that the value of its investment projects in Iraq amounted to about ten billion dollars, without mentioning other amounts. Refusing to comment on the topic.
The group’s CEO, Patrick Boyani, was in Baghdad on Sunday to sign the initials of the agreement with the Iraqi government, which is supposed to last 25 years.
The statement quoted Boyani as saying that “these agreements embody our return to Iraq from the widest doors, the country in which our company was born in 1924.”
The investment will cover the construction of a solar power plant with a capacity of 1 GW to supply the Basra region, and work on “gas recovery facilities in three oil fields” to generate electricity (the initial capacity is 1.5 GW, then 3 GW).
The investment will also cover the construction of a gas collection network and treatment units, the construction of a large-capacity seawater treatment unit, which is necessary for oil extraction (seawater injection technology), as well as the construction and operation of a photovoltaic power plant.
The literature of the agreement shows that the cost of the gas that will be produced by Total’s project in Iraq is equivalent to 20% of the cost of the gas that the country currently imports from Iran. Importing one million thermal units costs about 8 US dollars, while its production will cost one and a half to two dollars.
Iraq has huge reserves of oil and gas. It is the second country in the Organization of Petroleum Exporting Countries (OPEC), and oil accounts for more than ninety percent of its revenues.
But it is facing a severe energy crisis and suffers from constant power outages, which fuels citizens’ discontent with the government, which they accuse of corruption.
In the early 2000s, Total acquired about 35 percent of two exploration sites in the Kurdistan region of Iraq, which raised the reservations of the Iraqi government, which is trying to limit companies’ dealings directly with the region.
In reaction, the Iraqi government sought to cancel Total’s contribution to the southern Halfaya field, following the announcement of the signing of the agreement with the autonomous Kurdistan region.
The French company, its CEO, a former minister, and more than a dozen other people were also accused of corruption charges related to the oil-for-food program in Iraq, but the French judiciary acquitted them all in 2013.
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