Iraq opens oil field bidding

BAGHDAD - Iraq opened international bidding for eight enormous oil and gas fields Monday, paving the way for investment in a nation with some of the world's largest petroleum reserves.

If approved, contracts to update and manage those fields could involve the biggest foreign stake in Iraq since its oil industry was nationalized more than 30 years ago and help Iraq reach its goal of nearly doubling petroleum production by 2013.

That could be good news with the price for a barrel of oil breaching $143 for the first time ever Monday. But the contracts won't be signed for a year, and if Western firms win a dominant role it could feed perceptions that U.S.-led forces toppled Saddam Hussein to get at Iraq's natural resources.

Those concerns were heightened by expectations that Iraq would announce short-term no-bid consulting contracts with five Western oil firms on Monday. The New York Times reported about two weeks ago that the firms included Royal Dutch Shell PLC, BP PLC, Exxon Mobil Corp., Chevron and Total.

But Oil Minister Hussain al-Shahristani told a news conference Monday that the Iraqi government was still negotiating with the companies, which he did not identify. He said the firms were demanding a share of oil production while Iraq wants to pay in cash.

The minister said the short-term contracts were meant to boost production until the government awards longer-term deals next June. But some believe the consulting contracts could give the winning firms an advantage in bidding for the development contracts, which al-Shahristani said Monday would include 35 foreign companies.

The firms he named included seven from the U.S., three from Britain and others from Russia, China and other countries.

Al-Shahristani said the companies would be invited to bid on the oil fields of Rumeila, Zubair, Qurna West, Maysan, Kirkuk and Bay Hassan and the natural gas fields of Akkaz and Mansouriyah.

'These fields were chosen because their production can be raised in a short time and at a low cost,' said al-Shahristani.

He said even the longer-term contracts would include cash compensation and not a share of oil production.

'We don't see a need to allow anyone to share our oil,' al-Shahristani said.

Iraqi government spokesman Ali al-Dabbagh said Monday that there is no American influence on the Iraqi government's oil decisions.

'Politics does not come into this,' al-Dabbagh said. 'There is no preferential treatment for anyone, no matter who.'

All the oil fields the minister mentioned Monday are currently producing crude, and al-Shahristani said the new contracts would raise Iraq's production by 1.5 million barrels per day. Iraq currently produces 2.5 million barrels per day and hopes to raise that to 4.5 million by 2013.