The Iraqi government signed an agreement in principle with US oil firm Chevron on the Nassiriya project, comprising four exploration blocks in the southern province of Dhi Qar as well as several producing oil fields, seeking to reach 600,000 b/d within 7 years. This partnership aims to unlock Iraq’s untapped reserves and strengthen its position as a leading oil producer.
Additionally, Iraq signed a contract with US energy services firm Schlumberger (now rebranded as SLB) to ramp up output at the Akkas gas field, the Middle East’s second-largest.
The agreement paves the way for exclusive negotiations between Chevron and Iraq’s Ministry of Oil, creating a framework for exploration and development projects. This structured approach will help Iraq attract additional international investment while ensuring that key projects, such as Nassiriya, move forward efficiently.
As the second-largest producer in OPEC, Iraq holds vast energy potential but continues to face challenges in infrastructure, electricity shortages and attracting foreign investment. Chevron’s return marks a major step in addressing these issues.
US oilfield services giant SLB landed a huge six-well drilling contract in Iraq to increase production at the Akkas gas field in the country’s western Anbar governorate. The Iraqi cabinet approved a rapid plan to develop the Akkas gas field. According to a statement, SLB, a global multinational oilfield services company, will implement the first phase of the field’s development.
Iraq, OPEC’s second-largest producer, relies on oil exports for 95% of its state budget. Historically, the country has had difficulties in repaying international oil companies that develop major oil fields. In the last two years, Iraq has successfully reversed a trend of foreign oil companies retreating from the country by offering improved contract terms. This strategy has already attracted TotalEnergies (France) and BP (UK) to commit to new projects, together representing more than $50 billion in investments.
While not a new 2025 development, a 2024 Memorandum of Understanding (MoU) between Iraq, Siemens Energy, and SLB to capture flared gas and convert it into fuel for electricity has resurfaced in recent discussions. This covers about 120 million scf/d of gas and supports Iraq’s energy security by reducing dependence on Iranian imports.
Iraq remains dependent on Iranian gas imports for about a third of its electricity needs, despite being OPEC’s second-largest producer. In recent years, Iraq has taken measures to develop its natural gas resources and reduce the shortfalls in the electricity sector. The country’s natural gas reserves stand at 3,714 billion cubic meters. And it buys 50 million cubic metres of natural gas and 500 megawatts of electricity a day from Iran.
A member of the Organization of the Petroleum Exporting Countries, and one of the world’s leading oil producers, Iraq has struggled to provide its citizens with energy since the 2003 U.S.-led invasion that toppled Saddam Hussein. In the ensuing turmoil, under-investment and mismanagement have left the national grid unable to cope with demand.
In 2021, Baghdad experienced widespread protests over power outages exacerbated by heatwaves, with temperatures exceeding 50°C. Climate change and human factors contribute to rising temperatures.
This August power was out across Iraq as scorching summer temperatures pushed electricity grid demand to unprecedented levels. The electricity ministry said the grid suffered a “total outage” after two transmission lines were shut down “due to a record rise in temperatures, increased consumer demand, and increased electrical load in the provinces of Babylon and Karbala, which are experiencing an influx of millions of pilgrims” for a major religious commemoration.
Heatwaves in Iraq are “more intense and more frequent” than they were in the 20th century, meteorological service spokesman Amer al-Jaberi said, blaming climate change and human factors.
He said gas emissions and fumes from private generators “contribute to the rise in temperatures”, and called for the creation of a “green belt” around Baghdad “so the city can breathe a little”.
/OilPrice, Reuters/