Dubai: QatarEnergy, the Gulf country’s state-run petroleum firm, said Wednesday it has agreed to buy a 25 per cent stake in a massive gas project in Iraq, marking the rare entry of a major producer into a market that Western firms have pulled back from in recent years.
The Gas Growth Integrated Project, launched by French oil giant Total in 2021, aims to develop facilities to recover natural gas from several oil fields in southern Iraq. That’s where it is currently being “flared” — when the natural gas released through oil production is burned and released into the atmosphere. The project also aims to treat seawater for injection into oil reservoirs to boost production.
Total maintains a 45 per cent share of the project, while Iraq’s Basra Oil Company owns 30 per cent. QatarEnergies said the total investment in the project would be around $ 10 billion.
“We are pleased to be part of this significant development, which is important for Iraq’s energy sector,” Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and head of QatarEnergy, said in a statement.
Qatar is one of the world’s biggest natural gas producers and has extensive experience in building gas infrastructure.
Iraq urgently needs to develop local gas resources to meet electricity demands, especially during the peak summer months. The country is heavily reliant on Iranian gas and electricity imports.
The World Bank estimates that Iraq flares nearly 18 billion cubic metres of gas a year, a volume that, if recaptured, could be worth more than $ 2 billion. Flaring is a huge source of air pollution and greenhouse gases.
Oil provides 90 per cent of Iraq’s public revenues, but the industry has been mired in corruption and mismanagement since the 2003 US-led invasion that established a power-sharing government in Baghdad. Sectarian-based parties bicker over government ministries, appoint loyalists to key positions and dole out public sector jobs to supporters.
The oil-rich southern Basra region is among the country’s poorest and most underdeveloped, and residents say they have been sickened by the heavy air pollution caused by flaring.
ExxonMobile had been in negotiations over a similar multi-project deal, but it fell though after years of negotiations. Exxon announced in 2021 that it would be selling its shares from the West Qurna 1 oil field, and London-based BP is spinning off development of the Rumaila field, Iraq’s largest.
AP
