Already, postwar bids begin

French companies are in a more invidious position. France has been one of Iraq's biggest trading partners in recent years, yet its implacable opposition to the war has left it with few friends in Washington. French business chiefs have put together a working group to study possibilities, but some openly acknowledge that they may only get scraps to start with.

Analysts note, however, that the rhetoric from Paris has started to soften, in a sign that the government may be trying to help position the country for postwar work. Foreign Minister Dominique de Villepin sounded a conciliatory note at a recent London conference, and Foreign Ministry officials are confident that the law of averages can still work in France's favor.

"Nobody wants to have all their eggs in a single basket," adds Jean-François Delpech, with the Foundation for Strategic Research, a Paris think tank. "The Iraqi people are well-educated, and there is a substantial middle class in Iraq: I don't see them tolerating very long being just a puppet government."

The third European country with the strongest ties to Iraq is Russia, but its position looks the weakest. Moscow has burned bridges with both the regime in Baghdad (a key oil contract was torn up in December), and with coalition forces by opposing the war. Some analysts in Moscow predict that the Russian government will even have a hard time claiming back some $8 billion of debt Iraq owes. They add that Russian petro-technology is not on a par with that of Western powers, so it will be well back in the line to develop Iraq's oil industry.

A large share of the reconstruction billions will go into the oil industry to turn the country once again into one of the world's major crude producers. Early work will favor oil services firms, but in the long term, major exploration will be needed to make the most of reserves.

Western leaders have promised to put Iraq's oil wealth into trust so it can be used for the benefit of the people. Yet reviving the industry can be done only through massive investment by large Western companies - who will naturally look for some returns on their investments.

The most likely long-term scenario, says Fadhil Chalabi, a former top Iraqi oil official, is a large-scale privatization, with Western firms like Exxon Mobil, BP and Royal Dutch/Shell taking stakes.

"We have to have the participation of foreign companies," says Mr. Chalabi, now executive director of the Centre for Global Energy Studies in London. "We need to have a huge amount of money coming into the country. The only way is to partially privatize the industry and get as much foreign capital as possible."

Indeed, the need is so great - estimates call for $6 billion just for the oil industry to return to a pre-1991 state - that participants are not likely to be limited to just the English-speaking world.

"You can't blacklist oil companies," says Paul Floren, a spokesman for French giant TotalFinaElf. "Every oil field out there is developed under a consortium," which makes it difficult to exclude one company over another, he adds.

• Terrence Murray in Paris and the Associated Press contributed to this report.

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