WASHINGTON, Dec. 28 (UPI) -- Iraq's oil sector ends 2007 on a relatively upbeat note, with production at levels not seen since before the war. But the year had more downs than ups, and sustaining success through next year is far from guaranteed.

Iraq averaged production of 2.4 million barrels per day in November, according to the global energy information firm Platts. That's nearly a half million more than the post-2003 average. Oil exports, around 1.9 million bpd, fund nearly the entire federal budget.

"It was still a challenging year but they still managed to make some inroads," said Robert Fryklund, vice president of industry relations for energy consultant firm IHS. "We still have that issue of trying to get the national legislation up and running, and it seems to be stuck at the moment while they try to work out a few more of the security issues and other issues."

International oil firms are ready to bid on any oil deals the Iraqi Oil Ministry will offer. Oil Minister Hussain al-Shahristani has said negotiations for service contracts with major oil companies for some of Iraq's largest oil fields are under way and nearing the end.

As 2006 turned to 2007, news reports said factions had ended their fighting over the oil law. But the major issues, such as how much power the central government will have over setting and carrying out oil policy and to what extent foreign oil firms will be allowed into the currently nationalized oil sector, remain for the world's third-largest reserves.