TotalEnergies confirms deal with Iraq on $27 billion energy project

French oil major TotalEnergies confirmed it had reached an agreement with the Iraqi government on a long-delayed $27 billion energy project, reviving a deal which Baghdad hopes could lure back foreign investment in the country.

The deal was signed in 2021 for TotalEnergies to build four oil, gas and renewables projects with an initial investment of $10 billion in southern Iraq over 25 years.

But it has been held up by disputes over the terms of the contract.

Also Read | Johnson & Johnson to settle talc cancer claims for $8.9 bn

After the Iraqi government said on Tuesday it had agreed to take a smaller than initially demanded stake in the project of 30 per cent, TotalEnergies said in a statement it would own a 45 per cent stake, with QatarEnergy holding the remaining 25 per cent.

The French company said the deal reached with the Iraqi government "is a strong and positive signal for foreign investment in the country."

The Gas Growth Integrated Project aims to improve the country's electricity supply, including by recovering flared gas on three oil fields to supply power generation plants.

TotalEnergies said it would in addition develop a 1 GW solar power plant to supply electricity to the Basrah regional grid, inviting Saudi company ACWA Power to join the project.