If a multinational oil company were asked today to choose between massive new investment in Russia, Nigeria or Iraq, the answer might be surprising. Political pressure is making Russia an unattractive option. Corruption, poor working conditions and the kidnapping of foreign personnel are a substantial hazard in Nigeria.

But Iraq, with proven reserves of 115 billion barrels, is to open up six huge oilfields for the first time in 36 years. The country is set to welcome back American, British and French multinationals among 41 foreign companies invited to bid for long-term deals as well as short-term service contracts.

Yesterday Iraq's Oil Minister announced that his country's energy industry is to be opened up to foreign participation.

He wants multinationals, with cash and new technology, to make up for neglect and sanctions and rebuild the industry's ageing infrastructure, lift production and take advantage of today's record oil prices. Iraq's present output of 2.5 million barrels a day is the highest since the allied invasion five years ago. But it is well below the country's potential, as technical breakdowns, political wrangling and the sabotaging of strategic pipelines by al-Qaeda continue to thwart attempts to boost output. The Baghdad Government wants to raise production to 2.9 million barrels by the end of next year.

A return to Iraq is not without risk. Security, though much improved, is still precarious. This week a series of explosions has killed at least ten Americans and scores of Iraqis. The legal situation is murky. Iraq has still not approved an overall hydrocarbons law as the regions argue over revenue sharing. About 85 per cent of the reserves, estimated to be the world's third largest after Saudi Arabia and Iran, are in the Basra region. There are big reserves also in the north, around Kirkuk, and the Kurds have already made independent deals with some foreign companies that have angered both Iraq's Sunnis in the centre and Shias in the south.

Technical support agreements being offered to five multinationals, who must give an Iraqi partner 25 per cent of the contract value, would be short term. The companies are forgoing production-sharing agreements. Still, some Iraqi nationalists as well as anti-war activists will be strengthened in their delusion that the real reason for the 2003 invasion was the US wish to gain control of Iraqi oil.

Last-minute bickering over consultancy fees is delaying the final signing of a deal with the five companies - Shell, BP, ExxonMobil, Chevron and Total - to raise production during the interim period before long-term contracts are concluded. Such hiccups, though inevitable, hardly augur well for a smooth welcome back to Iraq for the former consortium members of the old Iraq Petroleum Company, expelled by Saddam in 1972. But Iraq is committed to going ahead.

Nouri al-Maliki, the Iraqi Prime Minister, has shown courage and vision in brushing aside prejudices and political wrangling to propose the new deals. Money in vast amounts is essential to rebuild shattered infrastructure, religious tolerance and political trust.

The solution lies beneath Iraq's soil. Raising oil production will help Iraq, the allies and the global economy.