French energy company TotalEnergies has sold its 18 per cent stake in the Sarsang onshore oilfield in the Kurdistan region of Iraq to ShaMaran Petroleum for $155 million.
An additional “contingent consideration” of $15m is also payable in the future depending on production and oil prices, TotalEnergies said in a statement on Thursday, without giving further details.
The Sarsang field, discovered in 2011, is operated by the energy firm HKN which retains 62 per cent ownership, with the Kurdistan Regional Government owning a 20 per cent interest. TotalEnergies' share of production in the field was about 3,500 barrels per day in 2021.
Iraq, Opec’s second-largest producer, depends on oil revenue to meet 90 per cent of government expenditure. It exports an average of 3.3 million barrels of oil per day, while production in the semi-autonomous Kurdish region amounts to just over 450,000 bpd. The country is aiming to boost its total production to 8 million bpd by 2027, from about 4.5 million bpd currently.
TotalEnergies, previously known as Total, has been active in Iraq since the 1920s with the discovery of the Kirkuk field. The company currently has a 22.5 per cent interest in the Halfaya oilfield. The company’s total production in the country was about 14,000 barrels of oil equivalent per day in 2021.
In September last year, TotalEnergies signed $27 billion worth of energy deals with the Iraq government for the construction of a new gas network and treatment units, a large-scale seawater treatment plant and a photovoltaic power plant with a total capacity of one gigawatt.
TotalEnergies is also developing the country's Ratawi natural gasfield. As part of the deal signed last year, the company plans to capture and process around 600 million cubic feet per day of gas.
Higher oil prices are helping Iraq boost its revenue. The country's foreign currency reserves are expected to surge more than 12 per cent to $90bn by the end of the year, according to the country’s central bank.
Iraq’s economy, which grew 5.9 per cent in 2021, is forecast to expand 9.5 per cent and 5.7 per cent in 2022 and 2023, respectively, as oil prices trade higher, according to the latest projections from the International Monetary Fund.