Iraq launched its first public campaign Friday to attract investment from international oil companies, rolling out a red carpet - literally - for executives from as far away as Russia and Japan. The oil minister said his country is now safe for business and desperately needs help in rebuilding its devastated oil infrastructure. “Tens of billions of dollars are needed for investment in the oil sector in the coming 10 years in different fields such as explorations for new fields, developing the discovered ones and refineries and other sectors,” Hussain Al-Shahristani told reporters at the opening of an unprecedented, three-day energy conference held in an unfinished convention center in the tightly secured area surrounding the Baghdad International Airport. Al-Shahristani appealed for help from the international companies. In return, he promised “full cooperation and a transparent and competitive environment for fair business.” A drop in oil prices to under $50 per barrel from a summer time high of $150 has hit Iraq hard since the OPEC country is heavily dependent on oil revenues for more than 90 percent of its budget. The government was forced to slash next year's spending plan from $80 billion to $67 billion due to the crisis. The Iraqis recently opened the first round of bidding since the 2003 invasion for new oil contracts to develop six major oil fields and two gas fields, choosing 34 of 120 oil companies that applied to participate. Those chosen included world giants Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp., Chevron Corp. and Total. None of those major companies was among the dozens of groups manning booths at the Baghdad conference, although the third-largest US oil company ConocoPhillips was there, along with several Japanese and Russian companies. Several private security companies also advertised their services at booths, underscoring the continued dangers of doing business in Iraq. “We understand that the security in Iraq is improving,” said Yasushi Kono, executive vice president for Japanese company Nippon Oil Exploration Ltd., which is among those chosen for the bidding process. “So we think it is high-time for the Japanese enterprises to come to Iraq and help Iraq people to reconstruct the energy industry in Iraq,” he added. “Opportunities are abundant.” Other companies, including Lukoil and Gazprom Neft of Russia and Indonesia's Pertamina, are looking to renew ties they enjoyed under Saddam Hussein's regime. China recently signed a $3 billion deal to develop the Ahdab oil field south of Baghdad, restoring a Saddam-era contract that had been canceled after the invasion. “Questions of security and instability in the country are very important,” said Nikolay Seregin, project director for Gazprom Neft, another one of the companies allowed to participate in the bidding process. He noted Iraq was particularly attractive amid the current financial crisis because of the low cost of doing business in the war-torn country. “At this time, when all oil companies are experiencing difficulties, Iraqi projects may be more interesting,” he said. Iraq sits on the world's third-largest proven oil reserves with more than 115 billion barrels. Al-Shahristani touted the remarkable security gains that have led to a sharp decline in violence over the past year following a US troop buildup in Iraq. “Now the government is looking to the sector as a critical engine for future growth and economic development,” he said. He also said much of Iraq's vast oil wealth has yet to be tapped, with only 15 of 78 discovered oil and gas fields developed and brought into production. Many desert areas in western and southern Iraq also have yet to be explored, raising the potential of undiscovered resources. Al-Shahristani said no field exploration work has been conducted in Iraq since 1990, when the UN imposed punishing sanctions following Saddam's invasion of Kuwait, which led to the 1991 Gulf War. Iraq hopes to triple the current daily production of 2.4 million barrels per day to 6 million barrels per day in 2018, Al-Shahristani said. He also cited the need to increase transportation, storage and refining capacity as production increases.
