Iraq holds the world's third largest oil reserves base after Saudi Arabia and Canada, with 112 billion barrels of proven reserves and an estimated 100 billion barrels of undiscovered reserves, which provides great opportunities for western oil companies like Chevron. In this paper, we analyze the Iraqi oil industry in perspective of Chevron's plans to invest in the region. The paper is organized into three sections: history of Iraq oil industry, its current state after American and British invasion and the direction it's likely to head in the next couple of years.
             Looking back at the history of Iraqi oil, reports before April 2003 show that modernization was really needed. According to the Middle East economic survey, problems at Iraqi oil fields include: years of poor oil reservoir management; corrosion problems at various oil facilities; deterioration of water injection facilities; lack of spare parts, materials, equipment, etc.; and damages to oil storage and pumping facilities. 60% of Northern Oil Company's facilities in the northern and central Iraq were damaged during the Gulf War. Iraq utilized sub-standard engineering techniques, obsolete technology, and systems in various states of decay in order to sustain production.
             The legal status of business contracts was also up in the air, increasing the uncertainty level for companies interested in doing business with Iraqi companies. Besides legal issues, companies had been looking up for a relatively stable security situation, a functioning government and other conditions to be in place before they move heavily into the country.
             Iraq's oil export infrastructure such as pipelines, ports and pumping stations were seriously disrupted by the Iran-Iraq war of 1980-1988, the 1990/1991 Gulf War, and looting and sabotage since then. The pipeline built through Saudi Arabia during the Iran-Iraq war, to the Red sea port of Mu'ajiz was closed after Iraq invaded Kuwai...