This time, however, no further exploration is planned despite Iraq’s vast oil reserves, reflecting the shift of some major oil companies to cleaner energy sources as the planet struggles to rise. of greenhouse gas emissions.
Instead, TotalEnergies will invest in a solar power plant and plan to improve the production of existing oil and gas fields in the country, OPEC’s second largest oil producer.
In a statement Monday, TotalEnergies said an initial investment of $ 10 billion would go to several projects, including a combustion gas recovery at three oil fields to supply local power plants. The appearance of gas occurs during oil production, generating harmful emissions of greenhouse gases and wasting gas.
A second project involves injecting seawater into oil fields to optimize production while maintaining a scarce water supply, and a third involves building a solar power plant to supply Basra’s regional network in Iraq. .
“These agreements indicate our return through the front door to Iraq, the country where our company was born in 1924,” said Patrick Pouyanné, CEO of TotalEnergies. “Our ambition is to help Iraq build a more sustainable future by developing its people’s access to electricity through a more sustainable use of the country’s natural resources,” he added.
Total was renamed TotalEnergies earlier this year to symbolize the company’s drive toward renewable energy. In January, it became the first major oil company to leave the American Petroleum Institute, a powerful oil pressure group, over its position in the face of the climate crisis.
However, its investments in Iraq do not represent a total outflow of oil. The Paris-based company aims to increase oil production at an oil field from 85,000 barrels a day to 210,000 barrels a day, according to a statement from Iraqi Prime Minister Mustafa Al-Kadhimi.
Altogether, Total is committing $ 27 billion in capital investment projects and running costs for 25 years.
Pouyanné said the projects demonstrated TotalEnergies’ ambition to support oil-producing countries in their energy transition by combining natural gas and solar energy production to meet growing electricity demand.
“It also demonstrates how TotalEnergies can take advantage of its unique position in the Middle East, a region where lower-cost hydrocarbons are produced, to access large-scale renewable projects,” he added.
The collapse in oil prices caused by the Covid-19 pandemic ravaged the Iraqi economy – which depends on oil for 90% of government revenue – and caused GDP to contract by 11%, according to the Fund International Monetary Fund. This has raised poverty rates and fueled social unrest.
In an opinion piece published in The Guardian last week, Iraqi Finance Minister Ali Allawi joined Fatih Birol, executive director of the International Energy Agency, to call on the world which produces less coal, oil and gas. But the energy transition had to include support for fossil fuel-producing countries to avoid undermining the stability of global energy markets.
“If oil revenues start to decline before producing countries have successfully diversified their economies, livelihoods will be lost and poverty rates will rise,” they said.
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