Iraq Seeks Western Investments to Reduce Gas Flaring and Increase Production

Iraq, among the largest emitters of flaring, is seeking to attract Western investors to develop its gas sector and decrease harmful emissions.

Partagez:

Iraq, the second-largest producer in OPEC, is one of the world’s largest emitters of gas flaring, a practice that releases usable gas into the atmosphere. The Deputy Minister of Petroleum, Hamid Younes al-Zobai, stated at a conference in Washington DC that the country is seeking to attract foreign investments, particularly from American and Western firms, to develop its gas sector and reduce this polluting practice.

The Ministry of Petroleum is encouraging foreign companies to operate in Iraq, and the current government is developing investment plans in cooperation with international companies. The goal is to make Iraq’s gas sector self-sufficient within the next five years, with a particular focus on reducing flaring and increasing gas production.

Initiatives and Investments

High-level Iraqi delegations have visited the United States twice this year to meet with American government officials and private sector companies. These visits have resulted in several agreements aimed at developing gas capture projects and reducing the country’s dependence on electricity imports from Iran.

American interests in Iraq are twofold: countering China’s growing influence in Iraq’s energy sector and reducing Iraq’s reliance on Iranian electricity imports, which are subject to American sanctions waivers. Despite these efforts, concerns related to security and corruption continue to deter American companies from making substantial investments in the country.

Impact of Chinese Investments

Meanwhile, Western withdrawals from Iraq’s energy sector have strengthened China’s control. PetroChina has taken over as the operator of the West Qurna 1 project after ExxonMobil’s exit in 2023, following the sale of its 22.7% stake to Iraq’s BOC. In the latest licensing round in May, Chinese companies won 10 of the 13 available oil and gas projects, thus consolidating their presence in Iraq’s oil sector.

A World Bank report released in June showed an increase in Iraq’s oil production in 2023, but only a 1% reduction in flaring. Seven agreements were signed with American firms in April to continue reducing this practice.

Challenges and Perspectives

Despite the Iraqi government’s efforts to attract investments, challenges remain numerous. Unstable security and endemic corruption pose significant obstacles to the entry and retention of foreign investments. However, economic and governance reforms undertaken by the Finance Minister, Taif Sami, in collaboration with the American ambassador, aim to create a more favorable environment for investment.

John Calabrese, an assistant professor at American University specializing in Middle East and East Asia foreign policy, emphasizes that Chinese companies have established a sustainable and competitive presence in Iraq over the years, giving them an advantage over Western companies.

Future Perspectives

Iraq continues to navigate a complex energy landscape, seeking to balance international influences while meeting its internal energy needs. Efforts to reduce flaring and increase gas production could not only improve the environment but also strengthen Iraq’s economy by reducing its dependence on energy imports.

The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.
Enbridge Gas Ohio is assessing its legal options following the Ohio regulator's decision to cut its revenues, citing potential threats to investment and future customer costs.
The small-scale liquefied natural gas market is forecast to grow at an annual rate of 7.5%, reaching an estimated total value of $31.78bn by 2030, driven particularly by maritime and heavy-duty road transport sectors.
The European Union extends gas storage regulations by two years, requiring member states to maintain a minimum fill rate of 90% to ensure energy security and economic stability amid market uncertainties.
Keranic Industrial Gas seals a sixty-day exclusivity deal to buy Royal Helium’s key assets, raise CAD9.5mn ($7.0mn) and bring Alberta’s Steveville plant back online in under fifteen weeks.
The Irish-Portuguese company Fusion Fuel strengthens its footprint in the United Arab Emirates as subsidiary Al Shola Gas adds AED4.4 mn ($1.2 mn) in new engineering contracts, consolidating an already robust 2025 order book.
Cheniere Energy validates major investment to expand Corpus Christi terminal, adding two liquefaction units to increase its liquefied natural gas export capacity by 2029, responding to recent international agreements.
A study by the International Energy Agency reveals that global emissions from liquefied natural gas could be significantly reduced using current technologies.
Europe is injecting natural gas into underground storage facilities at a three-year high, even as reserves remain below historical averages, prompting maximized imports of liquefied natural gas (LNG).
South Korea abandons plans to lower electricity rates this summer, fearing disruptions in liquefied natural gas supply due to escalating geopolitical tensions in the Middle East, despite recent declines in fuel import costs.
Russia positions itself to supply liquefied natural gas to Mexico and considers expanded technological sharing in the energy sector, according to Russian Energy Minister Sergey Tsivilyov.
Israel has partially resumed its natural gas exports to Egypt and Jordan following a week-long halt due to the closure of two major offshore gas fields, Leviathan and Karish.
Nepal reveals a significant potential reserve of methane in the west of the country, following exploratory drilling conducted with technical support from China, opening new economic prospects.
Petronas formalizes a memorandum with JOGMEC to secure Japanese LNG deliveries, including a first cargo from LNG Canada scheduled for July at Toho Gas.
Belgrade is currently finalising a new gas contract with Russia, promising Europe's lowest tariff, according to Srbijagas General Director Dusan Bajatovic, despite Europe's aim to eliminate Russian imports by 2027.
TotalEnergies and QatarEnergy have won the Ahara exploration licence, marking a new stage in their partnership with SONATRACH on a vast area located between Berkine and Illizi.
After four years of interruption due to regional insecurity, TotalEnergies announces the upcoming resumption of its liquefied natural gas project in Mozambique, representing a $20bn investment.
The French group has acquired from PETRONAS stakes in several licences covering more than 100,000 km² off Malaysia and Indonesia, consolidating its Asian presence and its exposure to the liquefied natural gas market.
In response to rising summer electricity consumption, Egypt signs import agreements covering 290 shipments of liquefied natural gas, involving major international firms, with financial terms adjusted to the country’s economic constraints.
Egyptian fertilizer producers suspended their activities due to reduced imports of Israeli gas, following recent production halts at Israel's Leviathan and Karish gas fields after Israeli strikes in Iran.