BAGHDAD (AFP) — Iraq on Thursday said it would be guided by the principle of competition when awarding contracts to global energy companies hoping to cash in on the country's vast oil and gas fields.
On Monday the oil ministry threw open six oilfields and two gas fields for international bidding by 41 companies, the contracts for which are expected to be signed in June next year.
Government spokesman Ali al-Dabbagh said Baghdad would award the service contracts only on the basis of competition.
"There is no intention of signing oil deals outside the law. The principle of competition will be applied. There is no preference to any company," he said.
The oil contracts, which are service contracts only, pave the way for energy firms based abroad to return to Iraq 36 years after Saddam Hussein threw them out.
The move is seen as the first major step towards developing the world's third largest oil reserves at a time of skyrocketing global crude oil prices.
Separately, Iraq is still negotiating consultancy contracts with some multinational firms to source their services before the long-term deals are finalised.
These companies are Shell, BP, ExxonMobil, Chevron and Total, and a consortium of other smaller oil companies.
Iraq wants to ramp up output by 500,000 barrels per day (bpd) from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion in March 2003.
However, political infighting over how oil revenue should be shared has slowed the process.
Crucially, the passing of the hydrocarbon law aimed at governing profit-sharing and foreign agreements has yet to be passed by parliament.
Exports of 2.11 million bpd currently form the bulk of the war-torn nation's revenues, and the oil ministry is keen to raise capacity over the next five years to 4.5 million bpd.
Iraq has crude reserves estimated at 115 billion barrels, but it is sorely lacking in high-tech infrastructure following years of crippling UN sanctions imposed after Saddam invaded Kuwait in 1990.
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