TotalEnergies CEO downplays Iraq energy deal progress

The proposed $27bn energy deal between Iraq and TotalEnergies still needs a "political answer", the French firm's chief executive Patrick Pouyanne said this week, somewhat downplaying a more upbeat progress report from Baghdad.

"I hope we will find a common ground," Pouyanne said on 21 March at the company's updated strategy. "I worked on it in the last month but again we need to have this political answer."

Iraq's oil minister Hayan Abdulghani on 20 March said talks between the two sides "have reached advanced stages," adding "we will activate the deal very soon".

The deal, which was initially signed in September 2021, has been entangled in Iraq's fragmented politics and by a dispute over the shareholding structure of the agreement. Pouyanne is seeking better terms than Iraq's standard technical services contracts, at the same time as offering Baghdad a boost to its fledgling energy transition goals. The deal comprises four oil, gas and renewables projects, with solar and gas capture key parts of the development.

But Iraq is insisting on taking a 40pc share in the projects rather than the 25-30pc envisioned by TotalEnergies.

The Iraqi parliamentary elections and the formation of a new government last October is putting the deal to test.

"For me, as I said to the authorities, the continuity of the voice of the state of Iraq is fundamental," Pouyanne said. TotalEnergies needs the signature of the government of prime minister Mohammed Shia al-Sudani to confirm and close the deal.

"For the time being we did not get it," Pouyanne said. "And if we do not get it, to be honest, I cannot expose the company over a mix of risks because we know there is the security situation. We know the geopolitical situation [in Iraq]."

Baghdad had hoped the deal would inject investments into its oil and gas sector and reverse a trend of international oil companies exiting from the country. Pouyanne did not shy away from noting that. "By the way, our peers are exiting the country," he said.

By Bachar Halabi