New Iraq contracts put companies in charge

ISTANBUL, Turkey, Aug. 27 (UPI) -- Iraq aims to bring international oil investors to another round of bidding by giving companies their first chance to operate national oil fields.

Iraqi Oil Minister Hussain al-Shahristani led a delegation to Turkey earlier in the week, highlighting the terms for a second round of post-war auctions.

A group of 10 undeveloped fields, including the massive West Qurna-2 complex, were showcased to representatives from 45 companies ranging from U.S. supermajor Chevron to Russian giant LUKoil.

Despite initial enthusiasm, the first round of contracts in June brought few developments as companies worried about insecurity and strict government terms.

The provisions of the June auction put the government in control of field development. The second round, which could come as early as November, puts international oil companies in charge for the first time, The Wall Street Journal reports.

Apart from those terms, Shahristani said the government had lowered the up-front signing fee from $2.6 billion to $1.2 billion in an effort to increase interest in the contracts.

Assem Jihad, a spokesman for Shahristani, said oil revenue for the country passed $4 billion in July, its highest post-war level. Production, however, has not increased substantially, putting Shahristani at the center of lawmaker criticism.

Iraq sits on the third-largest deposits of oil in the world.