Iraq Delegates Seek Greater Oil Investment

[BIG WAVE]

HOUSTON (AP) - Iraqi delegates visiting the United States on a trade mission said Wednesday they desperately need U.S. investment to begin rebuilding their oil and gas infrastructure.The Iraqi officials, who spoke on condition of anonymity because of security concerns, said Iraq needs at least $20 billion of foreign investment, but that number could more than double as conflict with insurgents persists.

So far, the U.S. has spent $1.7 billion on Iraq's oil and gas infrastructure, according to an audit released last month by the Special Inspector General for Iraq Relief and Reconstruction Fund.

The delegates, along with industry analysts, policy makers and corporate officials, were in Houston this week for an energy conference sponsored by Cambridge Energy Research Associates.



The delegates said they want to triple their production to 6 million barrels per day, or just under one-third of what the U.S. currently consumes.
Paul Simons, the State Department's deputy assistant secretary for energy and sanctions, said investment and rebuilding first requires a stable Iraqi government.
The threat of violence looms daily and repeated insurgent attacks on the nation's 4,350-mile-long pipeline systems keep investors leery.

Jim Placke, a senior associate with the Cambridge Energy Research Associates, said U.S. companies have laid some preliminary ground work, but it may be years before they're ready to invest.

One of those is Chevron Corp., which provides consulting services in Iraq to the Energy Department, company spokesman Don Campbell said. "Right now we are waiting for a safe, stable environment, then we will review our options," he said.

Phebe Marr, a senior fellow at the United States Institute of Peace, said the U.S. also must first learn what kind of government and energy policy emerges in Iraq before investing.
"We need to know if over time Iraq will slowly recreate the sense of government that brings the country together in a new form," she said. "If it can't do that, and we can't help, we are not only going to get a decline but also more violence.

"Oil is going to be critical, not just to the economy but to the government," she said. "It's going to bring these groups together or drive them apart."
http://www.wjla.com/news/stories/0206/301304.html

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HOUSTON (Reuters) - Iraq needs $20 billion in foreign investment to triple oil output over the next decade, Iraqi officials hoping to draw money into their war-torn country told executives in the U.S. energy capital on Wednesday.

The country is still thinking big despite daily violence that has helped push exports down to their lowest level in nearly three years, said the officials, who declined to be identified for security reasons.

It hopes to increase production from the current level of less than 2 million barrels per day to at least 3 million bpd by the end of the year, 4 million bpd by 2010, and 6 million bpd by 2015.

"We in Basra are floating on a lake of oil -- this is the gift of God," said one Iraqi oil ministry official touting the country's southern oilfields. "We hope to reach agreements with any company that offers commercial conditions that are acceptable by our government and our National Assembly."

Iraq's oil sector, which provides 93 percent of the government's revenues, is its best hope of reviving its economy.

The production forecasts were part of an elaborate presentation by a delegation of senior Iraqi officials to a group of business executives in Houston, one of several stops in a 10-day tour of the United States.

Even though Iraq's dire security problems have made it nearly impossible for most major companies to operate there, the event drew over 175 corporate executives - including some from top U.S. oil names like Chevron Corp. and ConocoPhillips.

HERE FOR THE MONEY

Others, such as Robert Kiker, president of Applied Petroleum Training Academy, which trains oil industry employees in Midland, Texas, came hoping to see how they could be involved in any foreign investment push in Iraq.

"They're here for the money - they want investment," said Kiker. He said he was impressed with the oil ministry's plan to boost production, but surprised to hear that unemployment in Iraq stood at 50 percent.

Previous projections by Iraqi officials have failed to live up to reality. Iraq's oil exports fell to 1.39 million bpd last year, well below the 2.1 million barrels level officials predicted earlier. On Wednesday, Iraq's Oil Ministry said the country exported just 1.1 million bpd for the second month in a row.
http://go.reuters.com/newsArticle.jhtml?type=topNews&storyID=11147606&src=rss/topNews

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