Save for later Print Download Share LinkedIn Twitter Iraq is talking to a European oil company about developing gas in its western desert region and may be just weeks away from a contract with Chevron for a big oil and gas project, its oil minister told the Energy Intelligence Forum.International oil companies (IOCs) are taking a fresh look at Iraq after years of stagnation, with the recent megadeal struck by TotalEnergies indicating a shift in Baghdad's strategy as it scrambles to secure foreign investment.Oil Minister Ihsan Ismael, speaking on Wednesday, declined to name the European company interested in the western gas project, but said it would include development of the 5.6 trillion cubic feet Akkas gas field.The talks began last week after negotiations with another company fell through, he added.Separately, Iraq National Oil Co. (INOC) and its affiliate Dhi Qar Oil Co. are in talks with Chevron about developing oil and gas at four blocks around the Nasiriyah oil field, holding their last meeting just two weeks ago, Ismael said.Long-Held PlansChevron has been looking to enter southern Iraq for more than a decade, and signed various memorandums of understanding in recent years, including one for development of Nasiriyah in August 2020. But Baghdad's uncompromising position on contractual terms nixed the company's efforts, and the talks appeared to have fizzled out.Earlier this week, however, Iraq's energy council gave its approval for negotiations with the US major.Ismael said on Wednesday that the technical requirements and scope of work had already been agreed, with only the commercial and economic model requiring finalization. "I think within the next few weeks coming we will be in a position to sign the final agreement," Ismael said.A Chevron spokesperson declined to comment.Iraq plans to raise its oil production to around 8 million barrels per day by the end of 2027. Its Opec-plus ceiling for November is 4.2 million b/d.Besides any new upstream deals, the minister said Baghdad is in "new discussions" with all of its existing IOC partners to revise their plateau production targets to ensure it achieves its goal. Work to upgrade the Basrah oil export terminal's ramshackle infrastructure — long seen as an obstacle to boosting output — will raise Iraq's southern export capacity to 6 million b/d by 2024, from 4 million b/d now, Ismael added. New Interest, New RisksDespite the renewed interest in Iraq, and the government's determination to nail down new contracts with IOCs, the politics of the Middle East have been changing, raising questions about aboveground risk once again.For example, the new government in neighboring Iran may oppose the strengthening of commercial ties with the US that a deal between Baghdad and Chevron would signify. Furthermore, Sunday's election will usher in a new period of political uncertainty for Iraq.Ismael expressed his hope that Iraq's next government will support the energy transition and the improved investment climate created by the outgoing administration.But he said he was 100% sure that it would provide "the same or more support" to the Total project, which involves capturing large volumes of flared gas and building a 1 gigawatt solar plant. INOC will have a 40% stake in the Total project as a financing partner, Ismael said.Total also emphasized the durability and win-win nature of the deal this week — despite the security risks in Iraq — with CEO Patrick Pouyanne noting that it would deliver profits for Total and much-needed gas for Iraq's power sector.Gunning for GasThe Iraqi minister noted the change in Baghdad's priorities over the past two years, with the finance ministry supporting investment in gas.He said $1.3 billion had been earmarked for the Royal Dutch Shell-led Basrah Gas Co. this year, and another $3 billion out to 2025."Our target is to reach not less than 4 billion cubic feet per day by the end of 2025 from associated gas … and to add another 1.5 Bcf/d of free gas by the end of 2027," he said.This was intended to give Iraq greater energy independence and to diversify the country's economic resources, he added.Meanwhile, there were further indications this week that Iraq's recent efforts to improve the environment for foreign investors are bearing fruit.Petronas CEO Tengku Muhammad Taufik had said last year that the Malaysian company was reviewing its future at the Garraf field because of concerns related to sustainability and economics. But he told the Forum on Tuesday that there was a good chance that Petronas would remain active in Iraq, given the signs of "improving conditions that can be sought from the host authority."