A group of Iraqi exiles advising the State Department has recommended Iraq should double its oil output by the end of the decade and welcome back foreign oil firms, The Washington Post reported yesterday.

The exiles belong to the State Department's Future of Iraq oil working group and made their recommendations in a report that has not yet been released, the Post said.

Before the war, Iraq produced about 2.5 million barrels a day of oil and the group suggested doubling this output.

The group said only by reforming the state-owned Iraq National Oil Co. along Western lines and giving foreign oil firms a share in future profits could Iraq attract the billions of dollars needed to boost production.

Doubling Iraq's output would require investments of more than $30 billion in oil wells, equipment, pipelines and terminals, group members said in their report.

The report did not suggest a single approach to attracting foreign investment. One option was for Iraq to sell up to 30 per cent ownership in the national oil company to outside investors while maintaining state control.

A second option was to create companies to handle exploration, refining and marketing. The policies of these companies would be determined by the state but the companies would be independent and market-based.