Iraq estimated the total value of the contracts and agreements concluded with American energy companies during Prime Minister Ali al-Zaidi's July visit to the United States at approximately $200 billion.
This was reported by Iraqi Oil Minister Basim Mohammed Hudair on July 21. According to him, the projects should increase the country's production capacity, expand the processing of associated gas and attract American technologies to the oil and gas industry. The minister estimated Iraq's current production capacity at 4.8 million barrels of oil per day.
The declared package includes seven key agreements related to the development of fields, management of oil and gas assets, modernization of energy infrastructure and the search for new export routes.
At the same time, the estimate of $200 billion does not yet mean that the entire amount has already been formalized as mandatory capital investment The package includes contracts, framework agreements, memoranda and preliminary agreements. The final amount of investments will depend on the results of technical studies, commercial negotiations, agreement on financing conditions and obtaining regulatory permits.
Chevron expands its presence in Iraq
The American Chevron has become one of the central participants in the new energy cooperation.
The company is negotiating to participate in the exploitation of the West Kurna-2 field, one of the largest oil assets in Iraq, as well as regarding the development of the Nasiriya deposit. Previously, the parties signed preliminary documents regarding Nasiriyah, the Balad field and several exploration blocks in Di-Kar province.
During a meeting with Chevron management, the Iraqi prime minister called on the company to accelerate investments in oil and gas production, the construction of oil refining and petrochemical plants, pipelines and storage facilities.
The Iraqi side declared its readiness to allocate land plots and speed up administrative approvals for large energy projects. Chevron, in turn, has expressed interest in deposits in the south of the country and the development of infrastructure for storage and export of raw materials.
Agreements regarding Western Kurna-2 and Nasiriyah are still mostly preliminary in nature. Before concluding the final contracts, Chevron must study the geological, technical and commercial data of the projects.
Halliburton will deal with the Bin-Umar and Sindbad fields
The American oil service company Halliburton received a contract from the state-owned Basra Oil Company for the integrated management of the development of the Bin-Umar and Sindbad oil and gas fields in southern Iraq.
The contract provides for the provision of services from integrated management of deposits, as well as support for the design, procurement and construction of the necessary infrastructure.
Involvement of Halliburton should help Iraq to increase the extraction of oil and gas from existing assets, introduce modern reservoir management methods and reduce technological losses.
Another agreement was concluded with the American HKN Energy regarding the development of the Khimrin field in the north of the country. The Iraqi government approved the project as part of a broader program to attract American companies to the oil, gas and electricity sectors.
Iraq is looking for alternative ways to export oil
One of Baghdad's strategic goals is to reduce dependence on routes through the Persian Gulf and the Strait of Hormuz.
Recent regional crises have shown the vulnerability of Iraq, most of whose oil exports pass through southern terminals. Restrictions on shipping and disruptions to exports directly affect production, budget revenues and the state's ability to finance infrastructure projects.
Iraq is considering expanding supplies through the Turkish port of Ceyhan and creating a route to the Mediterranean Sea through Syria. The Iraqi and Syrian sides have previously discussed transporting oil to the port of Baniyas, including the possibility of rehabilitating existing infrastructure or building a new pipeline system.
Chevron is also exploring the possibility of participating in export pipeline and storage projects. If implemented, they will make it possible to connect the oil fields of southern and northern Iraq with alternative marine terminals and reduce the country's dependence on the Strait of Hormuz.
However, such projects will require intergovernmental agreements, large-scale investments and security guarantees. The restoration of pipelines through Syria is complicated by the state of the infrastructure and the need to ensure the protection of the route along its entire length.
Baghdad turns to American capital
The current agreements reflect a broader turn of Iraq's energy policy towards the United States.
In recent years, a significant part of new oil and gas projects in the country have been awarded to Chinese companies. Large assets were also managed by Russian and European operators.
Ali al-Zaidi's government announced its intention to give priority to reputable American companies in the energy, telecommunications and technology sectors. To facilitate their entry into the market, the authorities have begun to review certain administrative requirements and strengthen the security of oil facilities.
For Iraq, such cooperation should ensure access to investment, technology, oil service equipment and political support from Washington. For American companies, the country is of interest due to its large oil reserves, underdeveloped gas industry and the need for infrastructure modernization.
Production growth is limited by OPEC+ agreements
Iraq intends to increase oil production capacity, but the actual amount of production depends not only on investments.
The country participates in the OPEC+ agreements and is obliged to comply with the established restrictions. In July, the countries of the group reaffirmed their commitment to existing agreements, including the need to compensate for previously allowed quota overruns.
Earlier, Iraq's Ministry of Oil announced plans to increase production capacity to more than 6 million barrels per day by 2028-2029. Achieving this goal will require the development of new deposits, restoration of existing assets, expansion of export infrastructure and approval of a higher quota within OPEC+.
The development of the gas industry remains a separate direction. Iraq seeks to expand the processing of associated gas, which is still burned in the fields, and reduce the dependence of the electricity industry on imported fuel.
The authorities plan to bring the use of extracted gas to the maximum possible level and practically stop flaring it by the end of the decade.
Implementation of agreements will take several years
A package of projects with American companies could become one of the largest investment reversals in history of Iraq's oil and gas industry.
However, a significant part of the agreements is at a preliminary stage. In order to move to full implementation, the parties need to determine commercial conditions, risk distribution, investment return periods and security guarantees.
Additional restrictions remain OPEC+ quotas, bureaucratic procedures, the state of the pipeline infrastructure and instability in the region.
If at least part of the announced projects are implemented, Iraq will be able to increase oil and gas production, expand processing, reduce dependence on one export direction and strengthen the position of one of the largest producers of energy resources in the Middle East.
