Both Qatari and US firms have reportedly submitted technical and commercial offers and expressed interest in investing in Iraq’s gas sector.
Qatar and United States-based companies are currently in talks with Iraq to invest in its untapped gas industry as Baghdad actively pursues plans to develop its resources, according to the undersecretary of the Iraqi oil ministry.
Bassim Khudair said on Monday that there are intentions to offer additional concession areas to foreign companies to develop gas deposits, which are estimated to be around four trillion cubic metres, Reuters reported.
He outlined plans by Iraq to boost its oil and gas production capacity by granting more projects to international companies.
Both Qatari and US firms have submitted technical and commercial offers and expressed interest in investing in Iraq’s gas sector.
The Iraqi ministry is engaged in negotiations with the Saudi oil giant Aramco regarding an agreement signed in May for the development of the Akkas gas field.
Iraq has a long-term goal of completely eliminating gas flaring by the year 2030.
Akkas, situated in the Western Al-Anbar Governorate, was found in 1992. It commenced production in 1993, extracting both natural gas and condensates.
The confirmed reserves of the Akkas field amount to approximately 168 billion cubic metres and its projected daily production is set to reach approximately 400 million cubic feet.
Earlier this month, Iraq’s Prime Minister Mohammed Shia Al Sudani directed his government to seek alternatives to Iranian gas imports, pointing to countries like Qatar and Turkmenistan as alternatives.
The statement came amid challenges in sourcing the requisite fuel for the country’s power plants, thereby risking the power production.
However, Al-Sudani voiced concerns over the impact of US sanctions and non-adherence to the gas dues payment mechanism, established in 2018, on the import of gas from Iran. These factors have culminated in a significant reduction of 50% in gas supplies from the neighbouring nation, exerting pressure on Iraq’s power production capacities.
Investments in Iraq
Last month, three Qatari companies and Iraq’s National Investment Commission agreed to develop $9.5 billion in projects in Iraq, including the construction of two power plants with a combined capacity of 2,400 megawatts.
The power plants will help Iraq reduce its reliance on neighbouring Iran for energy.
Iraq imports electricity and gas from Iran, accounting for between a third and forty percent of its power supply. This is especially important during the hot summer months, when temperatures can reach 50 degrees Celsius and power consumption soars.
Qatar’s Amir Sheikh Tamim bin Hamad Al Thani visited Iraq in June and announced plans to invest $5 billion in various sectors in Iraq over the next few years.
The amir’s visit to Iraq was his first since 2021 and came months after Iraqi Prime Minister Mohammed Shia Al Sudani assumed his position.
Since June, Iraq has started benefiting from the electrical interconnection project with Gulf countries in an effort to address a shortage caused by the decrease in Iranian gas supplies.
The project aims to fulfil the country’s domestic energy needs, particularly during the summer months when energy demand is high.
Currently, Iraq produces approximately 23,000 megawatts of electricity, although it requires around 35,000 megawatts to ensure uninterrupted power supply.