Iraq envoy: U.S. oil investment waiting on legal changes

A guard keeps watch over the al-Shiaaba oil refinery near Basra, in southern Iraq.

HOUSTON (MarketWatch) -- U.S. oil companies are slowly building their relationships with the Iraqi government in anticipation of a new legal regime that will allow them to invest there, the Iraqi ambassador to the U.S. said Monday.

"I see very strong interest from U.S. energy companies in Iraq," Ambassador Samir Shakir Mahmood Sumaida'ie told Dow Jones Newswires after a speech in Houston.

The companies "have visited me at the embassy and expressed that interest," while "waiting for things to be put in place," he said.

The passage of a new investment law in the next two or three weeks and a new hydrocarbons law "within this year" will create the right conditions for major U.S. investments, he said.

U.S. oil companies are "already building up their relationship with the ministry of oil" and providing training to Iraqi technicians, said Sumaida'ie, who added that he would meet with Exxon Mobil Corp. (XOM) executives on Monday.

The Iraqi oil sector has suffered from the turmoil that has submerged the country since a U.S.-led coalition overthrew Saddam Hussein's regime in 2003. Violence and the lack of a federal petroleum law has kept foreign companies at bay.

But oil majors are reportedly discussing investments in the Iraqi Kurdistan, where the security situation is better than in other areas, the region's oil minister said recently.

Baghdad, however, has long held that deals not approved by the federal government are null.

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