Iraqi Oil Ready for Risk-Takers

Checkpoint Baghdad

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Babak Dehghanpisheh

Larry Kaplow

Rod Nordland

Lennox Samuels

Silvia Spring

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Larry Kaplow

There was oil in little jars, gyrating on swiveling chrome and glass shelves along with kerosene and gasoline. On display were scale models and designs of gas stations that could be built in the future and pieces of pipeline skillfully welded by Iraqi technicians. And in case anyone missed the point, Iraqi Oil Minister Hussein Shahristani today opened the first Iraq Energy Expo and Conference with a reminder that Iraq, with 115 billion barrels under the desert, has 10 percent of the world's oil reserves. "This is a big number but I submit to you that it's underestimated," Shahristani told the crowd after his battering-ram contingent of guards and aides propelled him to a waiting lectern.

Iraq's oil industry is battered and antiquated but on the mend, at least according to the country's petro-boosters. Shahristani lamented how the industry had been "imprisoned in a 1970 time capsule" during the years of Saddam Hussein and the UN sanctions. It then suffered "near collapse" in the chaos after the 2003 American invasion – though the Baghdad complex of the oil ministry was one of the few locations that U.S. troops protected from looters. Shahristani, a nuclear scientist, was himself jailed by Saddam and managed to escape to refuge in the Kurdish north and, eventually, in exile. Now, he said, the Iraqi oil industry is "bootstrapping our way forward." The country's oil production still hovers around levels it averaged in the five years before the war started in 2003.

The Expo also required a bit of "bootstrapping." The three-day event was originally scheduled for October but was delayed because construction in the convention center was ongoing. The center, located conveniently for foreign executives inside the fortified Baghdad International Airport complex, was still not quite finished, with ductwork and conduits showing where hanging ceilings should be. And amid the booths, there was chatter about the major companies that were absent—Chevron, Royal Dutch Shell and others. They may not have considered it necessary to set up booths and oil jars to do business but some took it as a slight against the expo itself.

But the participants were upbeat and the event did bring together a critical mass of deal makers. ConocoPhillips was one of the big players that did show. Russia's LukOil, trying to revive major contracts from the Saddam era, had Moscow-based execs on hand. The 50-plus booths gave a chance for American soldiers to browse the brochures of an Iranian transformer manufacturer. The government-owned Trade Bank of Iraq had an elaborate two-story pavilion to introduce its credit cards and other services. The booth for the Iranian PetroPars showed its work on a rig in the Persian Gulf and boasted "Over 10 years of successful achievements."

As with most business gatherings in Iraq, security firms advertised their bodyguard and perimeter protection services. Some of the representatives on hand said Iraq's security, though improved, still is not ready for business and noted that they would have had trouble attending the event had it not been at the airport. Abdellatif Hasni, director of well services for the Iraqi oil services company OilServ, said it's the time for risk-takers: "We have to get the oil out."

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Checkpoint Baghdad

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