BAGHDAD — Iraq's oil minister on Monday announced the start of bidding by foreign companies for contracts to boost the production of eight underperforming oil and gas fields.
The contracts, to be executed in about 18 months, would open Iraq's oil fields to foreign companies for the first time since former dictator Saddam Hussein nationalized foreign concessions in the 1970s.
Oil Minister Hussein Shahristani said 35 companies had been selected to bid. Among them were seven from the U.S. and four each from China and Japan.
The bidding will proceed even though parliament has not yet ratified a national oil law to regulate foreign contracts. The measure has been stalled by disagreements over how to divide oil revenue among Iraq's regions.
Shahristani said there had already been too long a delay in upgrading depleted fields, which require new technology and foreign expertise to tap hard-to-reach reserves.
Iraq has been unable to invest sufficiently in its oil operations over the last two decades because of international sanctions and war. Insurgents have frequently attacked oil sites since the U.S.-led invasion in 2003, though overall violence is down throughout the country since an increase in American troop levels last year.
The work put up for bid Monday would increase production by 1.5 million barrels per day by 2013, approaching the prewar level of 4.5 million barrels a day, Shahristani said.
At a sometimes testy news conference, Shahristani renewed his criticism of the Kurdish regional government for signing deals with foreign companies that offer them a share of the oil they extract. In contrast, he said, the national government was only offering contracts to service existing fields. Development of new resources would come later.
To further protect Iraqi interests, Shahristani said, companies bidding for the contracts would be required to set up offices in Baghdad. Those winning the bids would be required to open branches in Baghdad and to establish partnerships providing Iraqi companies at least a 25% ownership share, he said.
"We do not see the necessity to have anyone sharing the Iraqi people's oil," Shahristani said, criticizing the Kurdish deals. "The Iraqi oil will remain under complete Iraqi control under the auspices of the national oil company once it is established."
The Oil Ministry itself has faced criticism over its efforts to retain four major oil companies as consultants.
