February 18, 2008

Iraq is inching toward attracting the billions of dollars needed to revamp its oil sector but international oil companies are still not ready to commit the massive sums required. Iraq has the world's third largest oil reserves, its reservoirs are among the cheapest anywhere to develop and the country is desperate for investment after years of sanctions and war. The lure of Iraq is all the more powerful as big oil has limited access to the Middle East's lucrative oilfields, which are mostly off-limits to foreign investors. An oil official said last year Iraq's oil sector could need as much as $75 billion. U.S. officials say the main reason foreign oil majors have avoided Iraq is the lack of an oil law, not security concerns. Security has improved, although it is still a dangerous country.