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General Electric and Siemens have signed agreements on major energy production contracts in Iraq, allowing the two companies to win multibillion dollar contracts in the country.
GE announced Sunday that it has signed cooperation principles aimed at increasing power generation capacity by 14 gigawatts, with immediate order for the commissioning of 1.5 GW next summer.
On Saturday, Siemens signed what the German engineering company called a "historic" agreement to provide Iraq with 11 GW of power generation over four years.
Neither agreement is binding, but the two companies hope they will lead to big deals in the future, once the new Iraqi government is sworn in.
Siemens appeared to be in pole position to win orders in Iraq until the last few weeks, when the Trump administration put pressure on the country's government to grant more business to GE.
However, the German company has ensured that it will still be in the running for the future contract after CEO Joe Kaeser traveled to Iraq on Saturday to sign his non-binding MOU with Qasim Al -Fahadawi, Minister of Electricity.
The equipment sales contracts to Iraq are not expected to be very profitable, but would be a significant gain for the troubled energy divisions of the two companies, which have been hard hit by rising renewable energy and weak growth in the energy sector. demand in developed countries.
Musab Al-Khateeb, director of Siemens in Iraq, told the Financial Times that the country was big enough for both companies. "No company can handle all the required infrastructure," he said, noting that GE supports 60 percent of Iraq's power infrastructure.
GE said it offers a "global" plan that includes financing, local investments and training. Baker Hughes, its 62.5% owned oil services company, also offers technology to capture the gas burned in the flares of the Iraqi oil fields, which could be used for power generation.
Russell Stokes, General Manager of GE Power, emphasized the importance of his rapid deployment plan with a capacity of 1.5 GW. "We understand how important it is to deliver power immediately," he said.
The Iraqi Ministry of Electricity said in a statement issued by GE that the company's action plan was "an ideal choice for our needs", offering technology, financing and social services.
Siemens said its memorandum of understanding, if it becomes a contract, "would increase current generation capacity by almost 50 percent" and guarantee 23 million Iraqis "reliable and sustainable electricity 24 hours a day, 7 days a week. 7 ".
Al-Khateeb said the negotiations in recent days have been intense and focused on details rather than political considerations.
"We worked on this issue from the bottom up rather than the top down," he said. "We blocked the procedure, funding and project budget over several years – then we opted for the protocol agreement."
Kaeser also highlighted Siemens' offer to make a broader contribution to the Iraqi economy. "We promised them affordable, reliable electricity, fight corruption, build schools and hospitals, and create thousands of jobs," he said.
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