Energy is a key part of the relationship between Iraq and Russia and energy contracts have become more strategic since 2017. Iraq’s oil and gas reserves and undeveloped oil and gas reserves are very attractive.
As reported by ‘Russia Briefing Website’, in the past years, with the progress in interactions, the withdrawal of large Western companies from Iraq, support for the activities of Russian oil and gas companies, and the purchase of shares, Russia has invested more than US$14 billion in Iraq. Russia is looking to expand its investment in Iraq to about US$45 billion by 2035.
While up to 96% of Iraq’s revenue comes from the sale of crude oil, reaching a record US$115 billion in 2022, Russia is one of the biggest players in Iraq’s oil and gas sector. Bilateral agreements are vital in increasing Iraqi production to 8 million barrels per day.
In addition, Russia and Iraq have signed new agreements aimed at increasing cooperation in the oil sector, including exploration projects, drilling, and gas flaring reduction. Luk Oil operates a large oil project in Qurna, located in Basra province. Recently, the contract for the development and production of Iraq’s Western Horn 2 oil field has been extended until 2045 with the aim of increasing production up to 800,000 barrels per day.
The presence of Gazprom in the Badra oil field in the Maysan and Garmian block is also important. Other Russian energy companies such as Zarubezhneft, Astrotranskaz, Tatneft, and Suezun Gas, are working to increase access to opportunities in Iraqi oil.
This year, Iraq’s Dhi Qar Oil Company signed a contract with Russia’s Luk Oil to set up the Eridu oil field. This will increase daily production from 30,000 to 250,000 barrels.
In 2017, Rosneft acquired 60% ownership of the Kirkuk-Ceyhan pipeline with a commitment to invest US$1.8 billion dollars.
There are other suggestions for Moscow regarding the Turkish-Syrian-Kirkuk oil pipelines, the revival of the Iraqi-Syrian pipeline, the gas pipeline from Kirkuk in northern Iraq to Europe, supplying Iraq’s domestic needs for electrical energy, and investing in the oil refinery in Mosul. On the other side, the OPEC+ agreement provides close cooperation and greater coordination of both countries with rich oil resources and common interests with the aim of maintaining stability in the global energy market.