Page 4 - MEOG Week 17 2021

MEOG COMMENTARY MEOG

Crunch talks for

Iraq amid Exxon exit

Baghdad is entering tricky negotiations with Total while it is
having to make compromises as ExxonMobil rushes for the exit.

IRAQ IRAQ has entered talks with French super-ma- well as working to raise output from the Ratawi
jor Total over contracts to govern their estimated oilfield from the current level of 60,000 barrels
$7bn deal, while Baghdad is also racing to find per day to 200,000 bpd.
WHAT: a company to replace ExxonMobil as the lead In the first phase of the project, Total will
The Ministry of Oil and operator at West Qurna-1 (WQ-1). target improving Iraq’s standing in low-carbon
Total are discussing how The deals are largely unconnected, though developments, capture all flare gas and produce
their recently announced the complexities of the Total agreement may 1 GW of electricity from a solar PV facility.
multi-faceted energy deal present similar challenges to some of those expe- High-level talks between Total and the Iraqi
will be governed. rienced by ExxonMobil leading to the company’s government were reported to have kicked off in
decision to withdraw from Iraq. October, with Total said to be preparing to invest
WHY: in two gas field development projects that will
Complex contract Obstacles to megadeal allow the country to increase output and reduce
negotiations have been The Total deal is understood to be proceeding its reliance on imported gas and electricity from
a thorn in the side of as planned, though given the complexity of the neighbouring Iran.
progress for Iraq and agreement which covers oil, gas, solar energy Meanwhile, Total will take over from Exxon-
fears over corruption and seawater reprocessing, coming to terms on Mobil as lead developer of the Common Seawa-
have seen foreign contractual obligations is likely to be a drawn- ter Supply Project (CSSP) that will treat 2.5mn
companies baulk at out affair. bpd of seawater from the Gulf and pipe it to
deeper involvement. The French company signed a heads of major southern oilfields, where it will be injected
agreement (HoA) with Baghdad in late March to increase pressure in oil wells. Given the strug-
WHAT NEXT: that would see Total build a facility to produce gles Iraq has faced in ramping up oil production,
Two Chinese companies natural gas from the southern oilfields of West this project will be critical to Baghdad achieving
appear set to take over Qurna-2, Majnoon, Ratawi, Tuba and Luhais, as its target of raising production capacity to 8mn
from ExxonMobil at West
Qurna-1, while Baghdad
had said it wanted to
bring in another US firm.

Associated gas project
at West Qurna-1,
Ratawi and Zubair.

Source: OIES

P4 www. NEWSBASE .com Week 17 28•April•2021