Statements made by Iraq's oil minister over the weekend might just be a sign that the country is on the verge of becoming a meaningful member of OPEC once again.

According to Hussain al-Shahristani, next month's OPEC gathering likely will result in still more production cuts intended to raise global crude prices to at least $70 a barrel. An increase on that order would represent an approximately 75% rise from current levels.

It's difficult to predict how large the new cuts would have to be to achieve that price differential. From September through December, OPEC members agreed to production pullbacks totaling 4.2 million barrels a day. And yet worldwide crude prices have continued to tumble from about $145 a barrel in July to just above $40 as last week came to a close.

Conversely, Iraq continues to work with several major Western companies, with an eye to boosting its own production at a faster rate than would be possible were it to go it alone. The country's current capacity totals about 2.4 million barrels a day, but with crude reserves totaling 115 billion barrels, its objective is to increase that level significantly. The goal is to nearly triple output during the next four to six years.

Western companies that are or have been involved in discussions with the nation's oil ministry include European-based Royal Dutch Shell (NYSE:RDS-A) and BP (NYSE:BP), along with ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX). It also appears that BHP Billiton (NYSE:BHP) has been involved with Shell, while France's Total (NYSE:TOT) has joined Chevron in the talks.

Amid the hammering out of details with oil companies, there remains consternation within Iraq about a series of deals that have been inked between the companies and the Kurds. The Kurds oversee three oil-rich provinces. Iraq maintains that the Kurdish agreements are slowing passage of a comprehensive hydrocarbon law because the agreements run counter to Iraq's best interests. If all goes well, however, Iraq intends to sign a first round of contracts by the middle of 2009, with another round likely being agreed to by year's end.

Returning to Oil Minister al-Shahristani's comments “that the price should be no less than $70 for a barrel” and the likelihood of further OPEC production cuts in March, I believe that, at some point the cartel's stream of reductions will have an effect on boosting crude prices. For that reason, I continue to urge Fools to maintain some representation in this sector. At the very least I would build a small position in ExxonMobil, the producer that appears to provide a solid opportunity for growth and expansion in the years ahead.

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