But Baghdad's ambitious plan to supplant Saudi Arabia as OPEC's leading producer may well run afoul of the oil cartel, which is expected to seek to impose a production quota on Iraq as it drives to increase its output as a key element of its national reconstruction.
Iraq's move to cement economic relations with India, the world's fifth-largest energy consumer, through long-term contacts with Indian refiners will provide an outlet for increased Iraqi oil production.
The offer was made by Iraq's industry and minerals minister, Fawzi Hariri, during a Wednesday meeting in New Delhi with Indian Oil Minister Murli Deora.
The state-run Indian Oil Corp., the country's second largest refiner, currently buys around 220,000-250,000 barrels of crude per day from Iraq.
"They have the reserves and they have the plans to raise output significantly," said IOC Chairman Sarthak Behuria, who attended the meeting.
"They told us they would be ready to offer us longer contracts after five years."
"We are desirous of a strategic partnership" with India, Hariri said. "By strategic partnership we mean a long-term relationship."
Iraqi Oil Minister Hussain al-Shahristani wants to boost oil production from its current level of some 2.4 million bpd to 10 million-12 million within the next decade.
That's more than Saudi Arabia or Russia is currently producing, and could threaten OPEC producers unless Baghdad accepts a quota. But Shahristani has made clear he will not accept any limitation of production that would impede national reconstruction.
He insists too that any quota must take into account Iraq's reserves. These are currently pegged at 115 billion barrels, ranking fourth after Saudi Arabia, Canada and Iran.
But industry analysts believe that Iraq is sitting on unexplored reserves that could double that total, eclipsing even the long-dominant Saudis.
On Jan. 29 Shahristani boasted in Baghdad: "We cannot find a reason to prevent Iraqi production from becoming higher than any other OPEC state, or even states outside OPEC.
"We expect this to happen over the next six to seven years with coordination and agreement with other OPEC producers."
Over the last few months Iraq has signed 20-year production contracts with major international oil companies covering 10 of the country's largest fields.
The plan is to boost production in the war-ravaged, long-neglected fields with state-of-the-art technology that Iraq does not have. This will involve investment in excess of $100 billion by the oil companies.
India's refiners are raising their capacity to meet growing demand and want long-term contracts that involve buying oil at prices lower than those on the spot market.
India, which imports 77 percent of its oil needs, is constructing terminals to stockpile crude and has offered Baghdad some of this space to secure supplies of Iraqi oil.
India's target is crude storage capacity of 5 million tons. The first terminal, with a capacity of 1.33 million tons, is scheduled to be completed at Visakhapatnam on India's east coast by mid-2011.
Two more at Mangalore on the west coast are due to be operational in 2012 to meet the needs of the world's second-fastest growing economy after China.