ERBIL, Kurdistan Region - The managing director of TotalEnergies in Iraq, Dunia Chalabi, on Tuesday said that the French energy giant is aiming for "full operational readiness" in executing its $27 billion megaproject in the country by 2027.
TotalEnergies in 2023 signed the largest foreign investment contract in its history, the Gas Growth Integrated Project (GGIP), to develop Iraq’s oil sector and steer the country toward a more sustainable path.
“The execution is going on and the full operational readiness is [anticipated to be achieved] by the end of 2027," Chalabi told Rudaw, describing it as "a very tight schedule."
The finalized deal gives TotalEnergies a 45 percent stake in the GGIP, followed by Iraq’s state-owned Basra Oil Company with 30 percent and QatarEnergy with 25 percent.
"We signed a contract with the [Iraqi] government and our partners, and we are sticking to the contract, and so are they,” Chalabi explained adding that, “So far, we are moving ahead together and working together to ensure we adhere to the [project] timeline to best execute the project and make it workable.”
Iraq’s Oil Minister Hayyan Abdul Ghani on Wednesday received a TotalEnergies delegation, including Chalabi, to discuss the development of oil and gas projects, said the ministry in a statement.
"It's advancing very well. You know, in every country, you have bureaucracy and routine. If you have the will to make it work, it works, and the will is there and is shared between the partners," she added.
The following is the full transcript of the discussion with Dunya Chalabi:
RUDAW: How much is the deal worth now?
Chalabi: So you must have heard of two different figures: The $27 billion figure which represents accumulation of [capital expenditures] CAPEX and [operating expense] OPEX over 30 years; and the $10 billion investment in CAPEX over the investment period.
So $10 billion, this is for...
Just a few years. Just a few years. Just investment.
And the total is...
$27 billion, for 30 years with OPEX.
The deal was signed some time ago, so why has there been a delay?
It wasn't quite a delay, actually. We first signed [the preliminary agreement] in 2021 and then there were some conditions required for it to be ratified. It took some time for those conditions to be fulfilled and for [the agreement] to be ratified. We finally signed the contract on July 10th, 2023.
Among the projects, which of them are now being implemented?
Well, we can talk about the implementation of all of them. I'll start with the oil because this was already in production, not because it is the most important among the projects. There are four projects, as you know, and we've added a fifth.
I will start with oil because the oil project had already started before the production. We are increasing the production and rehabilitating the [Artawi] field. We are also looking forward to increasing the production in two phases even further.
As for gas, the gas midstream project, which aims to capture and process flared gas from different fields, we actually started the pre-feed studies before the ratification in order to save time and finish the feed quickly. This year, we will be implementing the construction of the gas midstream project.
Meanwhile, the solar project is already under construction, and by the end of this year, we will be injecting the first 250 megawatts into the national grid. Finally, the water project - which we were also doing the studies during the time where we could with the the Basra Oil Company (BOC) - we will be implementing it shortly as well.
The contract includes capturing, I think, 600 million cubic feet of gas?
In two phases.
In two phases, from five fields?
Correct.
How will this contribute to reducing Iraq's reliance on imported gas?
So it is not so much about reducing reliance, but rather about providing access to electricity, because this gas that is today being flared will be captured, processed, turned into dry gas and then into electricity. So for the first phase, which is the first half of the 600 million cubic feet - 300 million cubic feet - this will be providing electricity for households in the south [of Iraq] and a significant number of households. The second phase will obviously surpass that number and in fact double it.
QatarEnergy has entered the project with 25 percent stake. What role does it play?
Well, it is a partner. We are three partners: TotalEnergies, the Basra Oil Company (BOC), and QatarEnergy. All three partners are working together to make sure that the projects advance on time.
And QatarEnergy will mainly be working on gas?
No, not at all. Their work is related to all [four projects], and we were in talks about a fifth project, which we have added. The fifth project aims to capture the gas that the Artawi oilfield [in Basra province] is producing. So, we put together a modular small gas capturing and processing plant that would take in the gas flared by Artawi.
You mentioned a water project. One part of your project is using sea water instead of freshwater water, while Iraq is in dire need of water now. Iraq officially says it is poor in terms of water resources. This is what the government says.
Indeed, there is water stress.
You mentioned studies about this. When do you think that the water project will be implemented?
Oh, we will be executing shortly. We are governed by a joint management committee, which comprises [representatives from] the Iraqi oil ministry as regulator, but also from QatarEnergy and BOC as partners. All the projects, all the decisions are governed by that joint management committee. We will move forward with implementation as soon as we reach an agreement to go ahead, after the studies have been finalized and the decision of the EPCs [engineering, procurement, and construction contracts] are made, then we will implement. So today in 2025, we are executing the projects.
What about the solar power plant with a capacity of 1000 megawatts? When do you think that will be implemented?
So it will be in four stages. It will be in the south near the Ratawi region, and it is in four stages. The first stage will be by the end of this year. The first 250 [megawatts] will be provided by the end of this year and will be injected into the grid by the end of this year. Then then next year, and over the next two years after that, the three other phases [will be implemented].
How does TotalEnergies ensure that these projects align with Iraq's commitment to reducing emissions?
So you must know that we ourselves are very careful about emissions and we make sure to include reducing emissions in our targets and as part of our own commitments. We have of course entered this agreement with the idea that we accompany the Iraqi government in reducing its CO2 footprint. And this project has a very good sustainability aspect since it reduces the carbon footprint significantly and provides cleaner energy from solar and gas [sources], access to cleaner energy for the population, and reduces the hydric stress. All this goes into the idea and the policies of energy transition.
One more question regarding the environment, we are in the era of climate change and all the big companies are somehow shifting to renewable energies. However, in the last few years, we've seen TotalEnergies return to Iraq. BP is back in Iraq as well, investing tens of billions of dollars in fossil fuel. You mentioned that part of it is to make Iraq rely on cleaner energy. The question is why?
Well, all energy companies are committed to doing as much as they can in terms of energy transition and when I focus on TotalEnergies, [it is because] we are committed to that strategy of energy transition, to the reduction of CO2 footprint and the multi-energy strategies that we have are designed to have integrated projects so that we can, on the one hand, ensure production, and on the other hand, [ensure] low emissions to we reduce the [CO2] footprint.
Usually big companies have their own concerns when it comes to investing such big sums in Iraq. How do you view this? What are the guarantees that you have to invest for 30 years, a sum of $27 billion?
We signed a contract with the authorities, with the government, with our partners, and we are sticking to the contract, and so are they. So far, we are moving ahead together, working together on ensuring that we respect the timeline [of the [project] and that we execute the project and make it workable.
Which expectation for the future of energy do you rely on more? Or I don't know if the word trust is more accurate to use, the OPEC outlook or the IEA?
So I can't really make a judgment on any of the two. What I can tell you is that we have our own energy outlook, like all energy companies, and all the outlooks, even those whom you would expect least of, talk about the need for energy transition and reducing the CO2 footprint in countries.
As TotalEnergies, you didn't participate in the five plus round of licensing. Do you have plans to participate in the sixth round, which I think will be more about investing in gas?
Well, we have a very big gas project at the moment. So, [if] we already have it, let's get it done.
Do you have any plans, besides these projects, to invest in other parts of Iraq?
Let's do this project [first]. We are very keen on making this project work on time and to adhere to the timeline. It is very important to us to commit ourselves to leaving a place better than we found it, to make it much better, and this is already a focal point for us.
You already have a lot to do and to focus on.
We'll see what happens in the future, but for the time being, as we speak, we're looking into that.
How many jobs do you expect will be created, directly and indirectly?
Directly 5,000 jobs and indirectly 10,000 jobs, about 10,000 jobs. We have a very high Iraqization rate and we're doing very well. We have a good track record for that.
I am always keen on asking about women's participation. You are the managing director of TotalEnergies in Iraq, and you are a woman, which is a very positive indicator. In the created jobs, what is the quota for women?
We don't have a quota. We have a general policy in the company of equality between men and women, and promoting women, including in their studies, so that they - girls and young girls - can through their studies become engineers. We are applying this in Iraq to promote women recruitment and we can do this given the qualifications that are there.
Is it hard to recruit women in job openings in Iraq? The oil and energy sector in Iraq is usually dominated by men.
Well, I am Iraqi, and I am a woman, and it is working.
What are the main challenges that you face in this big project?
Well, the real challenge is to really remain focused on synchronizing all five projects, making sure that they go well. Five parallel projects! It is huge! And doing all that goes with it, it is a positive challenge that we are focusing on. So all the things that come with it are taken as something that is part of the job.
We heard from other companies in the past that they face challenges from political elites, security challenges in part. How do you address such challenges?
Well, we haven't addressed such challenges yet since we haven’t faced them. We are very grateful for the support that we are getting. As I said to you, we have this joint management committee that is also governing us. So we have the support of the government, we have the support of our partners, and we're tracking ahead.
Basra Oil Company is also part of this project. How do you deal with government entities?
Very well. We work together hand in hand. We do. I know it. You don't seem to be convinced, but we do.
Usually I hear from other companies that working with the state-owned companies in Iraq is not easy because of the bureaucracy they have. Do you face such challenges?
It is working very well. You know, in every country you have bureaucracy and routine, every country in the world. If you have the will to make it work, it will work. And the will is there and is shared between the partners.
What is the expected timeline for the full execution of this contract and projects?
So the execution is proceeding. The full [implementation], I would say, operational readiness [will be achieved] by the end of 2027. Less than three years that is! We will make it work throughout the 27th. So I'm taking it large. But no, it's a very, very tight schedule.
It is a tight schedule, especially when we talk about energy, gas and oil, this field takes time. So far, are you progressing according to the schedule you had set?
Absolutely, we sure are!
That's interesting. You seem so confident, and that's a very good point. I really thank you, Dunia, for this interview.
Thank you very much.
