There are concerns that the $27 billion deal between Total and Iraq, which Baghdad hoped would reverse the exodus of oil giants from the nation, will be annulled by the country's new government because of disputes about terms and circumstances.
The Iraqi energy industry has struggled to attract substantial new investments since a flurry of post-invasion accords over a decade ago. Due to inadequate revenue sharing agreements, the Iraqi government has continually lowered oil output targets as international oil corporations who signed those initial arrangements have left due to poor returns.
Over the next 25 years, Total agreed to invest in four oil, gas, and renewable energy projects in the southern Basra region. Following a visit from French President Emmanuel Macron, the deal was signed by Iraq's oil ministry in September 2021.
Three Iraqi oil ministry and industry sources involved or acquainted with the negotiations told Reuters that the ministry did not have an agreement on the deal's financial specifics with all the government ministries that required to approve it, and it has been entangled in disagreements ever since.
The accord now needs approval from a new Iraqi government, including new oil and finance ministries, who won't be in place until at least the end of March, after a parliamentary election.
According to Reuters, Iraq's oil ministry expects the TotalEnergies contract to be completed by then.
Total also stated that the agreements remain subject to requirements to be met and lifted by both sides, adding that the deal was moving forward.
There have been reservations from Iraqi officials about the terms of the deal, which are unusual for Iraq, said the people close to the arrangement.
According to a copy of the letter seen by Reuters, a group of Shi'ite legislators wrote to the oil ministry in January demanding details of the contract and asking why it was struck without competition and transparency.
The treaty could be renegotiated or scrapped by Parliament.