However, attracting enough investment to develop oilfields and fix infrastructure bottlenecks that have prevented sustained gains in output will not be easy, analysts say.
An official document seen by Reuters indicated that in early June the Iraqi cabinet instructed the state-run Basra Oil Company to exempt U.S. energy companies currently in discussions for energy projects from certain regulatory requirements related to preliminary agreements.
“The recent decisions regarding Chevron, U.S. operators in the Kurdistan region, and other U.S. energy projects reflect a deliberate policy shift,” said Mohammed Abbas, a former manager at the state-run Basra Oil Company who now works as an energy consultant.
“Zaidi is using Iraq’s energy sector to strengthen ties with Washington and to reverse a perception among some U.S. energy majors that Iraq is a challenging environment for large-scale investment.”
Four Iraqi oil officials familiar with the talks with U.S. energy companies — including Chevron, ExxonMobil XOM.N, HKN, and others — said the push underscored Baghdad’s broader effort to deepen economic cooperation with the United States.
That outreach comes as Iraq grapples with the challenge faced by many oil-producing nations: attracting investment and expanding production while remaining constrained by the OPEC+ producers' group output limits.
Though Iraq holds some of the world’s largest crude oil reserves, longstanding production restraints have complicated ambitions to raise revenues to support a rapidly growing population.
Negotiations with Chevron have emerged as one of the most significant elements of Iraq's strategy. Earlier this year, Chevron entered exclusive discussions with Iraq over the giant West Qurna-2 oilfield, after Baghdad moved to replace Russia’s Lukoil as operator — potentially giving the U.S. company control of one of Iraq’s most productive assets.
Several Iraqi lawmakers and analysts indicated that the government’s energy initiatives aim to signal to Washington that Iraq is becoming a more attractive destination for large-scale international investment after years of security concerns, bureaucratic hurdles, and legal disputes.
Security has improved markedly since the defeat of Islamic State about a decade ago, though periodic drone attacks and regional tensions continue to pose risks to energy infrastructure.
Iraqi officials say security around key oil installations has been reinforced since the Iran conflict, with additional measures aimed at reassuring foreign energy companies.
"Prime Minister Zaidi comes from a business background and understands that winning over American energy companies, especially amid fragile regional security, is no easy task," said Murad Ismael, a lawmaker and member of Iraq’s parliamentary oil and gas committee.
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