Energy Qatar in talks to acquire stake in TotalEnergies’ $27bn Iraqi project By Reuters January 26, 2023 REUTERS/Stephane Mahe QatarEnergy is looking to acquire a stake of around 30% in the project Qatar is in talks to acquire a stake in French company TotalEnergies’ $27 billion energy projects in Iraq, three sources told Reuters, as Baghdad blocks attempts by Western energy companies to pull out of the country. A major investment by a Gulf state would mark a significant victory for Iraqi Prime Minister Mohammad Al-Sudani, who took office last October after political turmoil, and would be seen as a step towards countering Iranian influence. A source said QatarEnergy is looking to acquire a stake of around 30 percent in the project. Energy companies rarely own 100 percent of projects and prefer partnerships to reduce risk. After a flurry of deals following the US invasion a decade ago, international oil companies are trying to leave Iraq because of poor returns from revenue sharing agreements. When TotalEnergies and Baghdad signed a deal in 2021 to build four massive solar, gas, electricity and water projects in southern Iraq over 25 years, hopes of reversing the exodus were high. Exxon Mobil, Shell and BP have all sought to reduce their operations in Iraq in recent years. But the project, aimed at boosting the country’s economy and reducing its dependence on Iranian gas, is yet to take off. The Total Energy deal with Iraq, which would require an initial investment of $10 billion, follows a visit by French President Emmanuel Macron in September 2021. The terms of the deal, which have not been made public or previously reported, raised concern among Iraqi politicians and were unprecedented for Iraq, sources close to the deal told Reuters in February 2022. The deal included the construction of a natural gas storage network to supply local power stations through the expansion of the Ratavi field, large-scale use of water injection and a large solar power plant in Basra to boost production from other fields. This includes construction of a seawater treatment facility. But there has been little progress since then. Sources told Reuters last year that a dispute over terms risked scrapping the project. Qatar Energy and the Qatari government’s communications office did not immediately respond to a request for comment about the talks. TotalEnergies did not confirm the deal when contacted by Reuters. Iraq’s Sudani is travelling to Paris on Thursday and will meet Macron, a spokesperson for the Elysee said. A senior Iraqi oil ministry official said he was not aware of Qatar Energy’s plans to acquire a stake in the Total Energy project. Two of the sources said Qatar Energy and Total Energy have been talking about a stake in the project, and even though no final agreement has yet been reached, there was high confidence it would materialise. French and Qatari energy companies have close partnerships in Qatar’s vast liquefied natural gas (LNG) production as well as major energy projects around the world, including in Guyana, Namibia and South Africa. Total Energy chief executive Patrick Poyne told investors after the deal was announced that Iraq was a core part of the company’s focus in the Middle East and that the deal was a “win-win” for Baghdad and his company, which would be paid for through the sale of oil from the Ratavi field. He also said that TotalEnergies was looking for partners in the projects, in which it wanted to hold a 40 to 50 percent stake.