The focus of this paper is the contemporary conditions for major international oil companies' (IOCs) investment in oil producing states, with particular focus on their current and future potential for success in Iraq. The main argument is that major Anglo- American IOCs will not be able to establish a firm foothold in Iraq, a country with the world's third largest oil reserves, although many analysts predicted this to take place. In the first part of this paper, I argue that major IOCs are in crisis, as they face difficulties replacing their oil reserves, and are struggling to compete with national oil companies (NOCs). In order to improve their overall situation, many analysts point to Iraq as the IOCs' 'Promised Land'. They also argue that due to government-business vested interests, Anglo-American IOCs are helped by the US and UK governments in getting the best possible oil exploration and production deals with the Iraqi government. The February 2007 draft Iraqi Oil Law is an oft cited example. However, the historical record indicates that there are no vested interests between Big Oil and their home governments. Thus, the new legislation drafted by the Iraqi government, which is very attractive for foreign investors and IOCs in particular, was not influenced by Anglo-American corporate and government pressure, but simply by the Iraqi government's inability to secure sufficient investment funds to increase oil production capacity. Moreover, building on Alhajji's seminal 2003 analysis, I argue that even if this law passes the Iraqi parliament, this will not automatically imply long-term success for the IOCs due to various political and security factors, legal uncertainty, competition from NOCs, and the likely 'obsolescing bargain'. Thus, in reality, the future of Anglo-American IOCs in Iraq does not look promising, and rather than 'Promised Land', Iraq should be considered their reality check.