The Middle Eastern oil powerhouse Iraq is experiencing a development boom as major international oil companies return to the market after years of withdrawal.

Iraq has become the focal point of global oil and gas activities once again. On one hand, Chinese energy companies including PetroChina, Sinopec, and CNOOC have signed successive oil and gas development contracts. On the other hand, international oil giants are actively engaging with Iraq, with Chevron, BP and others making significant moves in the Iraqi market.

This momentum reached new heights recently when Total Energies formally signed a series of major contracts under the Gas Growth Integrated Project (GGIP) framework with the Iraqi government. The signing ceremony was personally presided over by Iraq's Prime Minister, with participation from Iraq's Ministry of Oil, Total Energies, Basra Oil Company, and QatarEnergy, culminating in the signing of joint operating agreements.

The Prime Minister's personal attendance at the signing ceremony demonstrates the Iraqi government's high regard for this project and reflects its strategic focus on domestic oil and gas exploration and development.

**Prime Minister Witnesses Major Project Signing**

Last Sunday, Total Energies officially signed a series of energy cooperation agreements with the Iraqi government worth $27 billion. The signing ceremony was attended by Iraq's Prime Minister, Qatar's Energy Minister, Total Energies' CEO, ENKA Turkey's CEO, and senior representatives from China Oil Engineering, among other key figures.

Iraq's Prime Minister stated that the signing of these agreements serves as important proof of the continuous improvement in Iraq's investment environment.

The Gas Growth Integrated Project (GGIP) forms the core component of this massive cooperation agreement, with Total Energies as the lead operator holding a 45% stake, Basra Oil Company holding 30%, and QatarEnergy holding 25%.

The contracts signed include four major components: joint operating agreements, seawater treatment plant, central oil and gas processing plant, and gas processing facilities. The contract signing marks that these four types of critical facilities have fully entered the implementation phase.

These projects have clear core objectives: enhancing Iraq's energy independence, ensuring domestic electricity supply, and reducing greenhouse gas emissions through technological means, achieving coordinated advancement of energy development and environmental protection.

Specifically, each facility has distinct planning and responsibilities:

Joint Operating Agreement: Focuses on developing the Artawi oil field under the GGIP framework.

Seawater Treatment Plant: Plans to build facilities with daily processing capacity of 7.5 million barrels, with treated seawater to be transported to southern Iraqi oil fields for enhanced oil recovery.

Central Oil and Gas Processing Plant: Designed with capacity for 210,000 barrels of oil daily, 163 million cubic feet of gas, and 240,000 barrels of daily water injection capacity, utilizing zero gas flaring technology to reduce carbon emissions from the source.

Gas Processing Facilities: Built with participation from China Oil Engineering, the core mission is to capture associated gas from Artawi and other oil fields, achieving the goal of processing 600 million cubic feet of associated gas daily in two phases.

Total Energies stated that these projects will not only inject strong momentum into Iraq's economic development but will also create 7,000 jobs for Iraqi citizens during the construction phase.

**Iraq Drives Major Development**

Today's Iraq, having signed cooperation agreements with Total Energies, is vastly different from its past. As a country located in the northeastern Arabian Peninsula, Iraq's economy has long been highly dependent on the oil industry. According to the International Energy Agency's predictions, including the Kurdistan region, Iraq's ultimately recoverable oil and gas resources (including crude oil and natural gas condensate) amount to approximately 246 billion barrels.

More crucially, Iraq's crude oil is not only abundant in reserves but also has extremely low extraction costs at only $1-2 per barrel, resource conditions that are rare globally.

Iraq's geographical location is equally advantageous, situated at the hub of East-West transportation routes and having independent seaports. This provides natural convenience for oil and gas transportation and trade.

Due to these factors, Iraq was once a "must-compete territory" for international oil giants, with well-known companies including ExxonMobil, BP, Total Energies, Eni, and Shell all having deployed exploration and development operations there.

However, since the 21st century, multiple oil giants have successively reduced or withdrawn from the Iraqi market. While this is certainly related to complex environmental and geopolitical changes within Iraq, disappointing operating returns were also an important factor.

At that time, Iraq's government signed mostly technical service contracts with foreign oil companies. The core of such contracts was the government using future resource revenues as collateral to introduce international capital and technology for developing domestic resources, while ensuring through contract design that the government obtained most of the benefits. Relatively, oil companies' revenues came from fixed per-barrel compensation fees, with little correlation to oil price fluctuations. When oil prices rose, excess profits basically belonged to the government; when prices fell, companies might face loss risks instead.

This undoubtedly increased operating risks for oil giants.

However, present-day Iraq is actively inviting oil giants to return with a completely new attitude. According to Iraq's 2024-2028 "New Five-Year Development Plan," by the end of 2028, crude oil daily production will increase from the current approximately 4 million barrels to nearly 6 million barrels, associated gas utilization will improve from 40% to 90%, while achieving 4% annual economic growth.

To achieve this goal and effectively attract international investment, Iraq significantly adjusted its oil and gas contract mechanisms in 2023, changing from the previous fixed service fee model to a profit-sharing model. Additionally, the Iraqi government has explicitly committed to further improving transaction transparency and strengthening measures to ensure contract stability and investment security, creating a more reliable operating environment for foreign companies.

**Oil Giants Gather in Iraq**

Against the backdrop of Iraq vigorously promoting oil and gas development, international oil giants represented by Total Energies are accelerating their return and gathering there. Various cooperation dynamics and project implementations are emerging intensively, and a vigorous oil and gas development boom has begun in this Middle Eastern oil powerhouse.

As early as last year, Iraq's global oil and gas block bidding attracted widespread attention. In this bidding, Chinese companies performed excellently, winning 10 out of 29 bidding blocks, with significant contributions from private oil companies. Zhongman Petroleum, Anton Oil Services and other companies all gained substantial rewards, adding important weight to China's layout in Iraq's oil and gas market.

Entering this year, international giants' investment moves have continued non-stop:

BP was first to announce joint development of Iraq's Kirkuk oil field group, covering 5 core oil fields including Baba and Avana, with total project value reaching $25 billion.

Chevron subsequently signed a framework agreement with Iraq's oil department, with cooperation scope including development of 4 new exploration blocks and upgrade operations of existing oil fields in Dhi Qar Province.

ExxonMobil has also sent positive signals, currently negotiating with Iraq on oil sector cooperation and potentially formally returning to the Iraqi market.

It's worth noting that prior to this, PetroChina had completed taking over ExxonMobil's "lead contractor" position in Iraq's West Qurna-1 oil field, further consolidating Chinese companies' leading role in local core projects.

In fact, China's "three oil giants" have long been deeply cultivating the Iraqi market, successively participating in multiple large oil field projects including Rumaila, Halfaya, and West Qurna-1, forming a stable and deep cooperation pattern.

Beyond traditional oil and gas development, Iraq also restarted its "oil-for-projects" program in August this year, attracting Chinese participation in infrastructure construction through a model of exchanging oil export revenues for investment. For example, a subsidiary of China Oil Engineering has successfully won the contract for Iraq's Basra Province seawater transmission pipeline project, with contract value reaching $2.524 billion.

Not only oil giants, but globally renowned oil service companies are also entering the market. Industry leaders including Schlumberger and Halliburton have clearly stated they have finalized oil and gas field development agreements with Iraq.

Now, oil development companies, oil service companies, and engineering construction companies have formed a "multi-party assembly" situation in Iraq. All parties are seeking to significantly boost Iraq's oil and gas production through collaborative cooperation, jointly pushing this Middle Eastern oil powerhouse's oil and gas industry toward a new development stage.