Iraqi Ministry of Oil and Basra Oil Company in Acquisition of Stake in Gas Growth Integrated Project
July 10, 2023
Cleary Gottlieb acted as counsel to the Ministry of Oil of the Republic of Iraq and Basra Oil Company (BOC), which is wholly-owned by the Ministry of Oil, in connection with BOC’s landmark acquisition of a 30% stake in the Gas Growth Integrated Project from TotalEnergies.
The agreements relating to the acquisition were signed in Baghdad on July 10, 2023, and they are expected to become effective before the end of July.
The Gas Growth Integrated Project is a milestone project for Iraq. The four-part project involves a reported $27 billion of total investments over its 30-year life and represents a major step toward establishing Iraq’s energy self-sufficiency and meeting its climate goals. Originally signed in 2021 in a transaction on which Cleary Gottlieb also represented the Iraqi parties, the project involves the construction of facilities to gather and process approximately 300 million standard cubic feet per day of associated natural gas that is current flared (with a possible second phase to increase to 600 million standard cubic feet per day), a major seawater treatment facility, and a 1GW solar power plant. All of these facilities will be funded by the development of the Ratawi oil field, which will be Iraq’s first oil development with zero routine gas flaring and will have targeted production of 210,000 barrels per day.
TotalEnergies initially held a 100% interest in the project. Under the new agreements, it will transfer a 30% interest to BOC, and it has also announced an intention to transfer a 25% interest to QatarEnergy. TotalEnergies will retain a 45% interest in the project and will be the operator (it will also retain a 100% interest in the solar facility).