During a keynote speech at Iraq's first ever oil and gas conference, held at the still being renovated Baghdad International Airport Convention Center, Hussain al-Shahristani said Iraq's oil reserves -- currently third-largest in the world -- are "understated."

He estimated an additional 214 billion barrels are to be discovered when the country is fully explored. If so, that would be 65 billion barrels of oil more than Saudi Arabia, according to the U.S. Energy Information Administration.

Shahristani said investment of international oil companies could help Iraq free itself from being "imprisoned in a 1970s time capsule," a reference to the start of Saddam Hussein's rule that brought three wars, mismanagement and U.N. sanctions, and resulting degradation of infrastructure, loss of new technology and Iraqi expertise.

Big Oil was represented at the Iraq Energy Expo only by ConocoPhillips and Marathon, with the rest too concerned with security, according to officials. Attendees included Russia's LUKoil, Rosneft and Gazprom Neft and exploration and service companies from Pakistan, Japan and elsewhere.

Shahristani said international oil firms can "take the opportunity to improve relationships by offering technical support to the Ministry of Oil and its companies. ... A challenge that we both will find stimulating and rewarding, in return for full cooperation and a transparent environment."

Aside from security, Iraq has other key issues to overcome to develop its vast reserves:

There's a dispute between the central government and the Kurdish Regional Government over the right to sign contracts. The KRG has signed two dozen exploration deals, nearly all of which Shahristani has called illegal. The companies involved have since been cut off from buying Iraqi oil and kept from pre-qualifying to bid on developing Iraq's largest oil and gas fields.

Also, there are critics who say Iraq's central and regional governments are giving international oil companies too much access to Iraq's oil instead of working to improve the once top-notch technical capacity of the Iraqi oil industry.

Shahristani said the oil sector is a "critical agent" of economic growth and the Oil Ministry has "full government support."

He reiterated his 10-year plan to increase oil production from less than 2.4 million barrels per day currently to 6 million bpd.

He said the 4.5 million bpd benchmark by 2013 would be bolstered by ongoing efforts to snag international investment by putting the largest oil and gas fields up for bid, with the first round to be awarded by mid-2009. That's a somewhat ambitious plan, as oil company officials told United Press International this week the process is still unclear and the terms initially appear to be less attractive than they'd like.

Oil production spiked this year as the price of oil peaked and since has slowly dropped, though not as drastically as the price of oil. Oil sales account for nearly all of Iraq's exports and are crucial to the federal budget, which has been revised downward three times. Iraq has earned $58.6 billion this year through November, according to the U.S. State Department's Iraq Weekly Status Report.

Finance Minister Bayan Jabr has called publicly for Iraq to increase production to make up for the budget loss.

Iraq is producing at capacity, and tens of billions of dollars of investment are needed to expand.

"The ministry is doing its utmost to increase production as much as we can," Shahristani told reporters after his speech. "That's why we did the first bid round, and we'll be going to the second bid round very shortly."

Beyond repairing the infrastructure throughout the value chain, Iraq must increase the capacity of its storage and transit facilities.

Shahristani said the 10-year plan envisions 25 million barrels of storage capacity and the ability to export 5 million bpd.

And refining capacity will increase from the current 540,000 bpd to 1.5 million bpd. Shahristani recently announced 750,000 bpd worth of new refineries in Nasiriyah, Maysan, Kirkuk and Karbala.

"Iraq has succeeded in laying the material groundwork for rebuilding its economy," he said. "The oil sector represents an important part of Iraq's recent history and also its future."

(e-mail: [email protected])

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