Iraq signed a preliminary agreement with France’s Total that includes four projects to develop oil fields, produce gas, build large energy infrastructure and generate solar energy.
All of the projects are located in the oil-rich south, the oil ministry said in a statement following a signing ceremony in Baghdad on Monday attended by Total's chief executive Patrick Pouyanne.
The size of the deal was not disclosed, but oil minister, Ihsan Abdul-Jabbar said on Saturday that Total will invest more than $7 billion into the country.
“The deal between the Iraqi national [energy] companies and Total will be one of the important pillars in developing the national economy,” Mr Abdul-Jabbar told Asharq News TV.
Total will build infrastructure to gather and process associated gas, a by-product of oil production, from five oil fields: Artawi, West Qurna 2, Majnoon, Toba and Luhais, the ministry's statement said.
The company will also upgrade the Artawi field to increase capacity to 200,000 barrels of oil per day, up from the current 60,000 bpd, Hamza Abdul-Baqi, general director of the state-run South Gas Company said.
The gas-related infrastructure being built will help to capture and process an extra 300 million standard cubic feet per day, Hamid Younis, deputy oil minister, said.
Iraq currently produces 1.5bn standard cubic feet of gas per day and plans to increase this to 4bn standard cubic feet in 2025.
Iraq, Opec's second-biggest oil producer, is looking to attract investment into its vast natural resources to help it to generate more of its own electricity and wean itself off imports from neighbouring Iran.
Total will also carry out a project to inject seawater into reservoirs to improve production capacity from its wells.
It will also work with the electricity ministry on a project to develop 1,000 megawatts of solar energy.
The deal will be sent to the cabinet for final approval.
During his interview, the oil minister said that political and administrative decisions have been finalised and the deal provided an economic model that represents a 'win-win' for both sides.
Talks between Iraq and Total began in October. In January, a memorandum of understanding was signed on building energy infrastructure, capturing natural gas that is currently flared off and producing clean energy.