By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
TotalEnergies Agreement Smells Filthy
The more information becomes available about this agreement, the more it exposes the extent of unfairness and damage to Iraq national interest, and the deception or scandal of "investing $27 billion" that was propagating and promoting this agreement. (1)
The Ministry of Oil (MoO) keeps mute; insists on a complete blackout and not publishing the terms of this odious agreement with TotalEnergies and contracts of its four projects. But available information indicates, so far, three very serious and financially costly direct disadvantages or burdens, particularly relating to Ratawi [Artawi] oilfield, in addition to the indirect burdens and consequences.
The first burden is represented by adopting a base line production (BLP) in the aforementioned field that is 27 thousand barrels per day (bpd) less than its actual production capacity; resulting in "gross" export revenues loss by Iraq estimated at $817 million annually. The corresponding "net" export revenues losses are less than that, depending on the details of the contract for developing this field, which is still kept secret!
The second burden relates to TotalEnergies and QatarEnergy companies share in the profits generated from the field's current production capacity, without they investing a single dollar in this field's current production capacity.
The amount that Iraq loses from this illegal and unjustifiable participation was estimated in six cases, the total of which ranges between $2.365 billion and $12.795 billion throughout the duration of the contract.
The third burden is represented by reducing Basra Oil Company's (BOC) share, to 30%, less than it should be, which is 41.43%. This causes huge losses, including the net profits throughout the contract period starting from August 16, 2023, in addition to the lack of clarity about the fate of $1.8 billion worth of fixed assets in Artawi oilfield!!
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Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.
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