Sudani stresses importance of preserving Iraqi environment with IOCs

03-05-2023
Chenar Chalak @Chenar_Qader
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ERBIL, Kurdistan Region - Iraq’s Prime Minister Mohammed Shia’ al-Sudani on Tuesday met with representatives of several international oil companies (IOC) working in the country, stressing the government’s desire to achieve gas self-sufficiency while also protecting the environment.

Oil and gas investment, Iraq’s partnership with international players, and obstacles facing the IOCs in implementing their projects in Iraq were also discussed during the meeting.

“The government has placed a high priority on investment in associated gas to achieve self-sufficiency in this vital natural resource as soon as possible,” read a statement from Sudani’s office.

The Iraqi premier urged the IOCs to expedite the implementation of the contracts they have signed with the Iraqi oil ministry, also ordering relevant authorities to facilitate the companies’ works by granting them entry visas among other recommendations.

“He also stressed the importance of companies taking into account environmental factors as agreed upon with Iraq to preserve the Iraqi environment.”

Sudani last week said that gas projects and an agreement with French giant TotalEnergies will make the country self-sufficient and an exporter of the natural resource within three to five years.

A deal signed between the Iraqi government and French TotalEnergies will see the energy giant build four projects for oil, gas, and renewables in southern Iraq in the span of 25 years. The contract was initially signed in 2021 but faced a delay due to disagreements over Iraq’s stake in the deal as Baghdad demanded a 40 percent share. 

The deal, however, was agreed upon early April and TotalEnergies will have the lion’s share with a 40 percent stake of the so-called Gas Growth Integrated Project (GGIP), followed by Iraqi state-owned Basra Oil Company with 30 percent, and QatarEnergy with 25 percent.

Iraq is still one of the world’s largest gas flaring countries. The flaring process is when oil wells burn the excess gas they can't store or use, and is a convenient way to deal with the waste product known as associated petroleum gas, however the process is among the main reasons for global climate change.

The country has never been a strong global competitor in gas exports. Instead, the country has for a long time relied strongly on imports of gas, mainly from Iran, to provide electricity for people.

Iran in 2022 said it had received $1.6 billion of the money owed by Iraq in return for Tehran’s gas exports over the years.

Iraq’s oil and gas sector has been under pressure since the International Chamber of Commerce (ICC) on March 23 ruled in favor of Iraq against Turkey regarding exports of Kurdistan Region oil through Turkey’s Ceyhan port, saying Ankara had breached a 1973 pipeline agreement that obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq.

The Iraqi oil ministry in its monthly report on Tuesday said that the country pocketed over $7.79 billion in oil sales in the month of April, a slight increase from March’s $7.5 billion.

The country exported 240 thousand barrels less in April but still saw a rise in the revenue due to the fact that the average price of one barrel was placed nearly five dollars higher than the average price for March.


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