Last week, Iraq and the French oil company TotalEnergies officially concluded a long-awaited energy deal worth $27 billion. The agreement aims to increase oil production and strengthen the country's energy capacity through the implementation of four projects involving oil, gas and renewable energy. The deal, which was originally signed in 2021, has been subject to delays due to disagreements between Iraqi politicians over terms.

In the GGIP (Gas Growth Integration Project), which aims to exploit Iraq's resources, the country has agreed to a 30% stake. This is slightly less than the 40% that Baghdad originally sought and slightly more than the 25% originally proposed by the oil group. Total will have a majority stake of 45% and QatarEnergy has been confirmed as a new third party with a 25% stake. The projects include injecting seawater into oil fields to boost production, processing natural gas and generating solar power. The deal is of huge significance as it will allow Iraq to increase oil production from around 4.5 million barrels per day (bpd) to potentially 13 million bpd over five years.

From a Western perspective, this agreement is of particular importance as it provides access to Iraq's vast but underdeveloped oil and gas reserves. This strategic move is part of their broader plan to seek alternative sources to compensate for the shortfall in supply from Russia. Although Iraq is the world's fifth largest oil producer, it has recently seen the departure of major investors. Shell has already abandoned one oil project and ExxonMobil and BP are also considering exiting other projects. Foreign investors have struggled because of low returns on some contracts and years of instability, including unrest last year. On the other hand, TotalEnergies has valuable previous experience of operating in Iraq. The company currently holds a 22.5% stake in the Halfaya oil field in the southern Missan province and an 18% stake in the Sarsang exploration block in the north of the country.