Near the beginning of December, Bloomberg sources suggested that the French oil major Total SA was looking to rid itself of its 18% stake in the Sarsang exploration block in northern Iraqi Kurdistan.
Now, Iraq’s oil ministry has signed an MOU with the oil giant to execute “large and promising projects” in Iraq, specifically in natural gas and clean energy, the country’s oil ministry said on Wednesday.
Total’s CEO Patrick Pouyanne was in the country at the time of the signing.
Total already has a 22.5% interest in Iraq’s Halfaya oilfield in southern Iraq—and it is still holding onto, for now, that 18% Sarsang asset that it was rumored to be exiting.
Also on Wednesday, Iraq’s state-run Dhiqar Oil Co announced that Lukoil’s trading arm Litasco would finance an oil project to double the capacity of the country’s Nassiriya oil project to 200,000 bpd. Iraq’s SOMO will pay Litasco with crude.
But Iraq’s oil deals don’t stop there. China is also muscling its way into Iraq’s oil industry, including via a $2 billion, five-year pre-payment oil supply deal between the Iraqi federal government and China’s Zhenhua Oil.
The deals come as Iraq works feverishly to pull itself out of the economic hole it now finds itself in, and is seeking emergency loans to the tune of $6 billion from the IMF as low oil prices continue to squeeze the country’s finances.
Iraq has been one of the worst laggards in adhering to the supply cut deal it agreed to as a member of OPEC, and its dire financial straits have likely contributed to its reluctance or inability to stick to the cuts.
As part of the deal it reached with OPEC members and its allies, known as OPEC+, Iraq and other laggards must meet all oil production cut obligations, even if they need to extend the cuts beyond the normal expiry.