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TotalEnergies, Iraq Agree on Delayed $10 Bn Project

An Iraqi man herds his cows on the Shatt al-Arab river next to the Nahr Bin Omar oil field and facility near Iraq's southern port city of Basr on April 4, 2023. (AFP)
An Iraqi man herds his cows on the Shatt al-Arab river next to the Nahr Bin Omar oil field and facility near Iraq's southern port city of Basr on April 4, 2023. (AFP)
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TotalEnergies, Iraq Agree on Delayed $10 Bn Project

An Iraqi man herds his cows on the Shatt al-Arab river next to the Nahr Bin Omar oil field and facility near Iraq's southern port city of Basr on April 4, 2023. (AFP)
An Iraqi man herds his cows on the Shatt al-Arab river next to the Nahr Bin Omar oil field and facility near Iraq's southern port city of Basr on April 4, 2023. (AFP)

French energy giant TotalEnergies announced Wednesday an agreement with Iraq on a long-delayed $10 billion project to improve the country's rundown electricity grid after resolving disputes over the terms of the deal.

The contract -- which includes investments in oil, gas and solar production -- was signed in September 2021 but a new government took office in Iraq last year and its demands did not please TotalEnergies.

Baghdad sought a 40-percent stake in the Gas Growth Integrated Project (GGIP), but Iraqi officials said in February that TotalEnergies wanted Iraq to have a smaller stake.

Iraq's cabinet said in a statement late Tuesday that it had accepted to reduce its demands to 30 percent "due to the importance of resolving the issue".

TotalEnergies confirmed Wednesday that Iraq's Basra Oil Company will get the 30-percent stake while a Qatari firm -- QatarEnergy -- will get 25 percent and the French firm will own 45 percent.

"TotalEnergies welcomes the continuity of the voice of the State of Iraq on this Development & Production Contract, which is a strong and positive signal for foreign investment in the country," the company said.

The agreement follows four rounds of talks in recent months between TotalEnergies chief executive Patrick Pouyanne and Iraqi Prime Minister Mohammed Shia al-Sudani, the company said.

Pouyanne was in Baghdad this past weekend at Sudani's invitation, TotalEnergies said.

Sudani had travelled to Paris in January for energy and security talks with President Emmanuel Macron.

Pouyanne had warned last month that he "will not embark the company in such a project if, in fact, we have to renegotiate all the terms".

He said Iraq was "not the easiest place to invest" in and TotalEnergies are aware of the risks of doing business there, but respecting the terms of the contract was "fundamental" to him.

Biggest Western investment

Despite being home to a wealth of hydrocarbon reserves, Iraq's neglected electricity grid is dilapidated and a victim of the country's rampant corruption, with power cuts lasting for hours.

Neighboring Iran currently supplies a third of Iraq's gas and electricity, and Baghdad is seeking greater energy independence.

The $10 billion Gas Growth Integrated Project includes recovering flared gas from oil fields to power electricity-generation plants.

A one-gigawatt solar power plant will be built to supply electricity to the Basra regional grid, with Saudi firm ACWA Power joining the project, TotalEnergies said.

The GGIP also includes the construction of a seawater treatment plant to provide water used in oil production -- an alternative to using fresh water from rivers and aquifers, the French firm said.

When the deal was signed in 2021, Iraqi officials said it would lead to a second round of investments of $17 billion, making it the largest investment by a Western company in the country.

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S&P Upgrades Italy in Surprise Boost for PM Meloni

Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
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S&P Upgrades Italy in Surprise Boost for PM Meloni

Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)

Credit ratings agency S&P Global upgraded Italy on Friday in a surprise move just days after Rome halved its economic growth forecast amid global market turmoil and said its huge public debt would rise this year and next.

S&P Global raised Italy's sovereign debt rating to BBB+ from BBB, citing its falling budget deficit, resilient exports and high domestic savings rate, and confidence that the European Central Bank will keep any inflationary pressures in check.

It said the new rating carried a stable outlook.

"The upgrade reflects Italy's improved economic, external, and monetary buffers amid rising global headwinds, and the gradual progress it has made in stabilizing public finances since the (COVID-19) pandemic's onset," S&P Global said.

Earlier this month Fitch affirmed its BBB rating with a positive outlook, while Moody's rates Italy Baa3 with a stable outlook.

S&P's upgrade is a boost for Italian Prime Minister Giorgia Meloni ahead of a meeting with US President Donald Trump in Washington on Thursday expected to focus on US trade tariffs which have hit financial markets worldwide and clouded economic prospects.

S&P Global noted that Italy's net external creditor position had strengthened over the last five years to around 15% of gross domestic product, compared with close to balance just before the pandemic.

"S&P's judgment rewards the seriousness of the Italian government's approach to budget policy," said Economy Minister Giancarlo Giorgetti. "In the general uncertain climate, prudence and responsibility will continue to be our course of action."

The agency had made no change to Italy's rating or outlook since July 2022, when it revised the outlook to stable from positive following the collapse of the government of former Prime Minister Mario Draghi.

STAGNANT ECONOMY

On Wednesday, Italy committed to keeping its budget deficit in check even as it slashed its economic growth forecasts against a backdrop of mounting uncertainty connected to the US trade tariffs.

Yet even before Trump's tariff announcements, the euro zone's third largest economy has posted virtually no growth since mid-2024.

Italian GDP edged up by 0.1% in the fourth quarter of last year from the previous three months after stagnating in the third quarter. No pick-up is expected in the near term.

In its multi-year economic framework issued on Wednesday, the government cut its forecast for 2025 GDP growth to 0.6% from a projection of 1.2% made in September, and lowered its 2026 forecast to 0.8% from 1.1%.

The Treasury confirmed its previous 2025 budget deficit estimate at 3.3% of national output and also confirmed its goal of bringing the fiscal gap below the European Union's 3% of GDP ceiling in 2026, maintaining a 2.8% target.

However, it said the public debt - the second highest in the euro zone after Greece's - would climb from 135.3% of GDP last year to 137.6% by 2026, before edging down marginally the following year.

S&P also forecast Italy's GDP growth at 0.6% this year, in line with Meloni's government, and said the country's rising debt would not stabilize until 2028.

Nonetheless, it said Trump's latest decision to suspend previously announced 20% tariffs on European Union goods for three months, and to impose a milder 10%, meant the hit to Italy's economy would be "manageable".