Is oil the key to the election?

Ahead of next week's general election, Iraq's oil sector is set to come under the spotlight, as many believe that oilfield development is a key factor to the country's economic recovery.

These are only Iraq's second elections for a full parliamentary term since the 2003 US-led invasion ousted Saddam Hussein.

The deals struck with foreign oil firms at the second round of auctioning last year are seen as a crucial part of current Prime Minsister Nouri al-Maliki's re-election campaign, Arabian Oil and Gas report.

"It remains impossible to predict the election's outcome, particularly on specific policy areas such as energy. It seems likely that the government will initially be relatively weak - at least during the first half of its tenure," said Samuel Ciszuk, Middle East energy analyst at IHS Global Insight.

"The result for oil companies - and service companies hoping to pick up lucrative associated contracts - is of course a rather high degree of continued political uncertainty. A major concern is that if the next government fails to build internal cohesion security could deteriorate nationwide," he adds.

"The upside of this uncertainty, however, is that a shaky government fighting for cohesion is more likely to leave the oil companies to their own devices."

Oil development

Since the second half of 2009, the country's security worsens with strings of car bombs targeting government buildings in Baghdad. Although last year Iraq inked 10 big oil development deals with international oil giants, lack of basic services and a slow reconstruction in the past few years have made many Iraqis disappointed with the current government's performance.

Al-Maliki has billed himself to voters as the leader that can ensure the development of Iraq's dilapidated oil sector and bring in billions of dollars to rebuild the country's struggling economy.

But, his promises could take years to fulfill and many experts see his predictions for increasing oil output as wildly optimistic. But what matters for the premier is persuading voters to keep him in his post to shepherd the process.

Iraq sits atop 115 billion barrels of crude, the world's third largest proven reserves of conventional crude oil. But current production of about 2.4 million barrels per day remains well below levels before the US-led invasion, Associated Press reported.

Al-Maliki's government has vowed, based on developers' promises, to raise output to more than 12 million barrels a day within six to seven years. The production increase would translate into hundreds of billions of dollars in sorely needed revenue for a government that relies on crude sales for 95 percent of its revenues.

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