INTERVIEW-U.S. visit lifts Iraqi investment hopes

WASHINGTON, July 24 - President Barack Obama's promise to boost commercial ties with Iraq has lifted hope for a surge of U.S. business investment needed to rebuild the badly war-damaged country, an Iraqi official said on Friday.

"President Obama when we met with him in the White House ... gave an assurance of solid support for Iraq on all levels and especially in the economic area," Sami Al-Araji, chairman of Iraq's National Investment Commission, told Reuters.

Obama met on Wednesday with Iraqi Prime Minister Nuri al-Maliki, whose oil-rich country is planning at least $70 billion in housing, agriculture, drinking water, sewage, hospital, education and other projects.

But six years after the U.S. invasion of Iraq, many companies remained wary about doing business there.

Araji admitted Iraq's delegation will return to Baghdad without any new U.S. business contracts, but he called the visit a success.

"My deal is to put all the opportunities in front of the investor and have a receptive eye and a promise for the future. And that's what I got, a receptive ear and a promise for the future," he said.

More than 100 Iraqi business leaders are expected to travel to Washington in October for an investment conference hosted by the U.S. Chamber of Commerce.

Araji said he was hopeful U.S. Commerce Secretary Gary Locke would visit Baghdad after Obama encouraged U.S. companies to to invest in the country.

"We are looking for direct investment, partnerships and delayed payment schemes," which would allow the Iraqi government to pay for a project at an agreed period of time after its completion, Araji said.

Spanish and Japanese business people will visit Baghdad for investment conferences in September or early October, while France and Germany will host events in November.

Although many companies remain concerned about the security situation in Iraq, "I think security is not as big an issue as it used to be ... The environment is much, much better than before and is improving," said Araji.

On another matter, he refrained from any criticism of the Iraqi Oil Ministry for the way it handled the country's first major energy auction since the 2003 invasion.

Most companies balked at the ministry's tough payment terms and only one of eight oil and gas fields offered for development was actually awarded -- to a consortium led by BP Plc and China's CNPC.

"We are happy with what has taken place. It was genuine. It was transparent and we look forward to the next round, which will be in next two to three months and it will be a much bigger participation," Araji said.

Even though only one contract was awarded in the first round, it was "a very big one" that will double Iraq's oil production, he said.