Subscribe  Free Trial
Energy coverage sponsored by:

TotalEnergies starts Iraq exit as negotiations falter

The death of the $27 billion deal would represent a multi-year setback in Iraq’s efforts to boost production of oil, gas, and electricity.
Then-Prime Minister Mustafa al-Kadhimi (center) oversees TotalEnergies CEO Patrick Pouyanné (left) signing one of four deals with Iraq's Oil and Electricity ministries on Sept. 5, 2021. (Source: Prime Minister's Media Office)

TotalEnergies has begun to withdraw staff from Iraq after a rocky meeting between CEO Patrick Pouyanné and Iraqi Prime Minister Mohammed Shia al-Sudani in Paris, foreshadowing what could be the end of a $27 billion mega-deal that promised to provide badly needed infrastructure for the country’s energy sector.

In the meeting last week, Sudani and Oil Minister Hayyan Abdulghani reportedly surprised Pouyanné by reviving a demand that had torpedoed previous negotiations — that Iraq should take a 40 percent stake in the project rather than the 25 to 30 percent envisioned by the company.

“The oil minister insisted on Iraq's share of 40 percent,” said an Iraqi official briefed on the talks. “The CEO had to withdraw from the meeting.”

A second person familiar with Total’s operations in Iraq said the meeting lasted 10 minutes. Neither TotalEnergies nor Sudani’s office released a statement after the meeting.

Five officials familiar with Total’s operations in Iraq said company staff who had been working to begin implementing the project in country were beginning to leave as of Tuesday. A TotalEnergies spokesperson could not be reached for comment in time for publication.

"Total [staff] came to BOC to today to say goodbye to us," said an official at the state-run Basra Oil Company (BOC), which had been working with Total to prepare for the activation of the deal. "They were sad... the contract is beneficial for Iraq."

If the deal falls apart, Iraq would lose an opportunity to build billions of dollars' worth of infrastructure with the potential to amplify revenues across the energy sector: water injection needed to boost production at the largest oil fields in Basra; a processing plant needed to capture valuable associated gas that is otherwise being wastefully flared; and solar power generation.

This content is for registered users. Please login to continue.
If you are not a registered user, you may purchase a subscription or sign up for a free trial.