David Teather reports from New York:
Officials are likely to recommend the creation of a state-run company to own and manage the Iraqi oil industry, shutting out foreign investment and countering, in part, allegations that the US-led invasion of the country was merely an oil grab.
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Both American and Iraqi oil officials are proposing a state-owned business model based on similar arrangements in neighbouring Saudi Arabia and Kuwait.This approach differs markedly from America’s desire to liberalise other parts of the Iraqi economy, where policy makers are investigating wide-scale privatisation of state-owned enterprises.
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In an interview with the Wall Street Journal, Robert McKee, the senior oil adviser to the occupying coalition provisional authority, said: “Our preference is definitely in that direction. It is just pragmatism.” A report being prepared for the interim oil minister would be highlighting “best practice” from other state-run oil firms, he said.Both the Americans and the Iraqis say a state-run oil company could still attract massive foreign investment. In practice, however, the Saudi Arabian and Kuwaiti examples suggest there is unlikely to be much opportunity for US, British and other international oil companies.
See also here and here. Argument still to follow, I guess, about what it really means.