LONDON – Iraq (search) plans to invite executives from as many as 60 foreign oil companies to a Baghdad (search) conference to discuss ways of developing the country's vast oil resources, the first event of its kind since the ouster of Saddam Hussein.
The meeting, scheduled for December, would be "a brainstorming session" for companies hungry for investment opportunities and for Iraqi oil officials eager to acquaint themselves with key players and technologies long denied them under U.N. sanctions, the event's organizer, Paul Bristol, said Thursday.
The Iraqi Oil Ministry (search) has hired Bristol, an independent, London-based oil consultant, to arrange the conference.
Most international oil firms have held back from trying to invest in Iraq because of concerns about security and the lack of an internationally recognized administration in Baghdad. For example, the Royal Dutch/Shell Group of Cos. said it wants to see the establishment of "a legitimate, stable government" in Iraq before pursuing any opportunities there.
With the U.S.-picked Iraqi Governing Council gradually gaining international acceptance, many potential investors are now showing renewed interest, Bristol said.
"There's been a change in their attitude, I think, over the past two months," he said.
In September alone, representatives of Iraq's interim leadership won admission to an Arab League meeting in Cairo, Egypt; a Conference on Disarmament session in Geneva; annual meetings of the World Bank and International Monetary Fund in Dubai; and a gathering of the Organization of Petroleum Exporting Countries in Vienna, Austria.
The U.N. Security Council on Thursday began debating a new U.S. draft resolution on handing over power in Baghdad to Iraqis and giving the United Nations a larger role there. The prospect of a new resolution with broad international backing is likely to encourage more oil companies to re-examine Iraq.
"ChevronTexaco would be pleased to participate in any potential meetings with regard to potential involvement in Iraq," said Maripat Sexton, a Houston-based spokeswoman for ChevronTexaco Corp.
Iraq's economic health and political stability depend on the rapid recovery and expansion of its oil industry. Iraq has the world's second-largest proven crude reserves, and oil is its most valuable export.
However, postwar looting and sabotage of pipelines and other facilities have hampered Iraq's efforts to revive an industry already crippled by mismanagement under Saddam Hussein and a 12-year U.N. embargo.
The December conference will focus on the "upstream" part of Iraq's oil industry -- production at existing oil fields and exploration for and development of new deposits. Iraqi oil officials do not plan to discuss investment in refineries, distribution or any other "downstream" businesses.
Smaller, independent oil companies are likely to lead the way in investing in the Iraqi oil patch, just as they did in the North Sea in the 1970s, Bristol said. He expects Iraq's Oil Ministry to sign its first exploration contract with an independent company by the middle of next year.
The next wave of investors would be the large multinational companies, such as Shell, Exxon Mobil Corp. and ChevronTexaco.
"I think they'll follow along very quickly, within a year at the latest," Bristol said. "Iraq is too big for it not to be a development area for the majors down the road."
Bristol would not identify which companies the oil ministry wanted to invite to the conference.
Like many Middle Eastern producers, Iraqis are fiercely proud of their oil wealth and have long been suspicious of foreign companies that want to help explore for and develop Iraq's oil deposits.
But the oil majors' interest in Iraq is not conditional on any decision the Iraqis might take to privatize their oil industry. The oil ministry probably would work with the majors on a contractual basis to leave the actual crude reserves under Iraqi control, Bristol said.
Iraqi oil officials are keen to meet foreign executives because they long have been "out of touch" with international oil experts and modern drilling technologies, Bristol said.
About 30 Iraqi officials are expected to attend the December meeting.