Iraq's Oil Deals Dominate PM Election Campaign

Backed by armed bodyguards, international oil executives have flocked to this southern Iraqi city to survey their potentially lucrative prizes: the fields that it is hoped will one day dramatically increase output of cheap, plentiful crude. For their companies, the fields that they won the rights to develop in two biddings rounds last year are their first foray into Iraq's oil sector in over three decades.

For Iraqi Prime Minister Nouri al-Maliki, the executives and their investments are a vital part of his bid to win a second term in 7 March 2010 elections. Al-Maliki has billed himself to voters as the leader that can ensure the development of Iraq's dilapidated oil sector and bring in billions of dollars to rebuild the country's struggling economy.

Al-Maliki's promises could take years to fulfill and many experts see his predictions for increasing oil output as wildly optimistic. But what matters for the premier is persuading voters to keep him in his post to shepherd the process. "Al-Maliki can present himself as a guarantor to these plans ... whether they are going to meet their huge targets or not," Mideast oil analyst Samuel Ciszuk of the London-based IHS Global Insight said.

Iraq sits atop 115 billion barrels of crude, the world's third largest proven reserves of conventional crude oil. But current production of about 2.4 million barrels per day remains well below levels before the 2003 U.S.-led invasion that toppled Saddam Hussein. Al-Maliki's government has vowed, based on developers' promises, to raise output to more than 12 millionbpd within six to seven years. The production increase would translate into hundreds of billions of dollars in sorely needed revenue for a government that relies on crude sales for 95 % of its revenues.

Iraqi officials hailed the multibillion dollar deals as the dawn of a new day in the oil sector after two international auctions since June secured commitments from international firms to develop 10 oil fields. The government plans to develop 11 others left over from the two biddings on its own.- AP