Qatar is in talks to acquire a stake from French company TotalEnergies' (TTEF.PA) $27 billion cluster of energy projects in Iraq, three sources told Reuters, as Baghdad hopes to stem efforts by Western energy companies to exit the country.
A major investment by a Gulf state would mark an important win for Iraqi Prime Minister Mohammed al-Sudani, who took office last October following more than a year of political turmoil, and would also be considered a step towards countering Iranian influence.
QatarEnergy is looking to acquire a stake of around 30% in the project, one source said. Energy companies rarely own 100% of projects and prefer partnerships to reduce risk.
After a flurry of deals after the U.S. invasion over a decade ago, international oil companies have been trying to leave Iraq due to poor returns from revenue sharing agreements.
When TotalEnergies and Baghdad in 2021 signed an agreement to build four giant solar, gas, power and water projects in southern Iraq over 25 years, hopes for an exodus reversal were high. Exxon Mobil (XOM.N), Shell (SHEL.L) and BP(BP.L) have all sought to scale back their operations in Iraq in recent years.
The TotalEnergies deal with Iraq, which will require an initial investment of $10 billion, followed a visit from French President Emmanuel Macron in September 2021.
The terms of the deal, which have not been made public or previously reported, had raised concerns among Iraqi politicians and were unprecedented for Iraq, sources close to the deal told Reuters in February 2022.
The deal includes the construction of a natural gas gathering network to supply local power stations through the expansion of the Ratawi field, building a large-scale seawater treatment facility to boost output from other fields using water injection and a large solar power plant in the Basra region.
But there has been little progress since then. Sources told Reuters last year that disputes over terms had risked scrapping the project.
QatarEnergy and the Qatari government communications office did not immediately respond to a request for comment about the talks.
A senior Iraqi oil ministry official said he was not aware of QatarEnergy plans to acquire a stake in the TotalEnergies' project.
