Even while the security situation in Iraq remains dire, it seems the prize will be just too great for the oil majors to resist. The country has proven reserves of 115 billion barrels of oil, around the same as Iran, but it is thought that its actual reserves could be anywhere up to 300 billion barrels . . . which would make it bigger than Saudi Arabia.

Much of the west of Iraq remains unexplored.

John Teeling, chairman of Petrel Resources, the Irishand London-listed oil exploration company which has had interests in Iraq since 1997, says: "Iraq has 70 discovered, undeveloped fields.

You'd die for any one of them.

Even the small ones have a billion barrels. If this isn't the holy grail, it's right nextdoor."

It is hard to exaggerate the scale of the opportunity in Iraq, especially given the fact foreign companies are, essentially, shut out of the rest of the Middle East and Russia is increasingly hostile to international players. "It costs $1 a barrel to get oil out in Iraq.

If you're getting $60 for it, that's good economics. You don't have to go to Harvard to figure that out, " Teeling says.

War-torn Iraq is currently producing less than 2 million barrels a day, well down on the 2.8 million before the 2003 US and Britain invasion.

Tariq Shafiq, a former executive in the Iraq National Oil company and one of the experts called in to draft the law, says Iraq could "very easily" get to 3.5 million barrels a day. He says it is "physically" capable of producing 10 million barrels a day . . . around the current output levels of Saudi Arabia, the pre-eminent producer today.

Shafiq, who now works for the consultants Petrolog & Associates, says that foreign involvement in Iraq's oil industry is needed for its technical knowledge, not capital . . . given the high price of oil, investment is pretty much self-financing. "Iraq has been left behind, " he says.

The former president Saddam Hussein cut Iraq off from foreign oil technology, first by pursuing the war with Iran in the 1980s, then the international sanctions of the 1990s. Advanced oil recovery techniques, such as water injection, passed by.

The petroleum law, now in its third draft and expected to go before the Iraqi parliament soon, allows wide-ranging and deep involvement in the sector. It envisages three type of international contract . . . buy-backs, production-sharing agreements (PSAs) and service contracts.

The PSAs are the deals most favoured by big oil, as they allow the foreign company to book the reserves.

Buy-back contracts typically require upfront investment from the international company, with a guaranteed rate of return to repay the money.

Shafiq says that the draft law does not specify a figure for the permitted rate of return, it talks of a "fair" return. This he interprets as being no more than 20%.

The law awards much power to the regions for negotiating contracts, with the central government given an oversight role, a feature that did not exist in Shafiq's original draft and one that he believes will play into the fracturing of Iraq. However, the oil revenues will be shared between the provinces according to their populations, not their oil resources . . . that gives the oil-poor Sunni areas a big stake in the success of the industry.

While the oil industry's majors and super-majors are not currently in Iraq, the minnows such as Petrel and the Norwegian group DNO, which is actually producing oil in the relatively safe Kurdish north, have shown that it is possible to operate in Iraq.

The lack of a law setting out the rules for the oil industry and the extreme security problems have kept the big operators formally away. But they have been active behind the scenes and, once the petroleum law is enacted, it is expected that all of them will rush to the Iraq oil ministry's negotiating table.

Shell and BP, for instance, have obtained precious knowledge of two of Iraq's biggest oilfields by providing free assistance. These projects do not involve having company personnel on the ground in Iraq. BP has studied the reservoir data from the Rumaila field in the south, to advise on how to maximise future production.

BP says: "Once the security situation permits, and the Iraqis seek assistance, we would consider opportunities there, as we would elsewhere in the world."

Shell is currently undertaking a reservoir study of the Kirkuk field, in the north, "in order to assist the Ministry of Oil to enhance production from this field".

Shell is more forthright. It says: "Shell has a very long history of working in Iraq.

We would welcome the opportunity to help Iraq rebuild its energy industry, but we will only enter the country once security, living and working conditions are improved. We have had discussions with Iraqi officials from the Ministry of Oil from outside the country, in order to better understand the complex situation in Iraq. We have experience with the technical and operational challenges that Iraq will face in future. This is based on our experience with similar situations in the Middle East.

We aspire to establish a longterm presence in Iraq and a long-term relationship with the Iraqis, including the newly elected Government."

The Western oil majors will almost certainly have to wait until the security situation in Iraq improves before they are prepared to put their people on the ground. However, they are likely to tie up the Ministry of Oil in negotiations over projects until that happens . . . assuming that Iraq does not simply dissolve into all-out civil war. And, as the south and the north of the country, where most of the oil lies, are relatively less violent, it may be possible to operate in the country even while the central region around Baghdad continues to be a bloodbath.

The Russians and Chinese are almost certain to send their people in, no matter what the risks. The US group ConocoPhillips has pulled off a clever arrangement. Russia's Lukoil negotiated with the regime of Saddam Hussein for rights to the giant undeveloped West Qurna field. ConocoPhillips has taken a 20% equity stake in Lukoil . . . a deal approved by the Kremlin . . . and it has apparently negotiated a 50% share in Lukoil's West Qurna interest. So the Russian personnel would take the risks but Americans would still benefit.

Iraq's oil wealth is just too great for the majors to miss.

The question is not if they will go in, but when?