A Reuters report on September 14 indicated that TotalEnergies SE (NYSE:TTE) and Iraq’s government have agreed to discussions on energy projects in the country. The French energy giant’s projects would involve large-scale investments, aimed at increasing Iraq’s oil production while contributing to improving the country’s energy sovereignty and transition.
Patrick Pouyanne, Chairman and CEO of TotalEnergies, stated that the company’s investments in Iraqi oil and gas are currently valued at $12 billion, with intentions to increase this amount to $16 billion in the future. Mr. Pouyanne had a meeting with Iraqi Prime Minister Ali al-Zaidi in Paris, where the PM discussed plans to boost his country’s oil production to 10 million barrels per day over the next five years.
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TotalEnergies Can Build on its Iraqi Footprint:
TotalEnergies already has a substantial presence in Iraq through its 45% stake in the Gas Growth Integrated Project (GGIP), a roughly $10 billion multi-energy development that includes oil, gas, solar power, and seawater treatment. The latest discussion could allow the French company to grow its production base in Iraq while leveraging infrastructure it is already building through GGIP.
TotalEnergies expects the Ratawi field’s full development to reach 210,000 barrels per day, and all four existing components of the GGIP are already in execution, reducing the need to develop an entirely new operation platform in Iraq. The potential upcoming projects could therefore add to the company’s earnings and cash flows while increasing the utilization of existing infrastructure and technical capabilities.
The development comes at a time when hydrocarbon expansion has become the core of TotalEnergies’ near-term upstream strategy. The company is targeting to grow its total oil and gas production by 3% in 2026, with Ratawi among the projects contributing to that growth.
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Iraq Bet Faces Key Hurdles:
The immediate financial impact of the announcement remains uncertain, as it did not provide a value, timeframe, production target, or expected contribution to TotalEnergies’ earnings and cash flows.
There are also significant execution and geopolitical risks, as TotalEnergies is planning to increase its exposure to a region embroiled in conflict and ongoing supply disruptions. Mr. Pouyanne already stated in the company’s Q2 earnings call that “Hormuz is a battleground and the risks of crossing are extremely high … We are beginning to consider this could become the new normal, with the strait opening on and off”.
Conclusion:
TotalEnergies’ plans to raise its investments in Iraq from $12 billion to $16 billion could help grow its production base and support long-term earnings growth. However, with project details still unclear and high geopolitical risks, the potential near-term upside remains uncertain.
Market Sentiment:
TotalEnergies SE was held by 34 hedge funds in the Insider Monkey database at the end of Q2 2026, up from 30 in the previous quarter. However, while the total number of hedge fund investors increased, their cumulative stake value in TTE declined from around $3 billion in Q1 to almost $1.7 billion at the end of the second quarter.
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