Iraq Opens Bidding on Oil Field Contracts

Shahristani has decided to forge ahead nonetheless, emphasizing that the new contracts would be technical service deals and would not allow international firms to keep any of the oil.

Iraq is a rare prize for oil companies, with known reserves of 115 billion barrels, the third-largest in the world after Saudi Arabia and Iran. Iraq's reserves are particularly attractive since other oil giants such as Venezuela and Russia have become less hospitable to foreign investors.

But Iraq also represents a considerable risk.

With the new oil legislation stalled, the government is relying on a law from the Hussein era. And while violence has dropped from the terrifying levels of a year ago, Iraq is still plagued by car bombs, sniper attacks and kidnappings.

"You have a degree of uncertainty, both legal and security uncertainty," de Ladoucette said. "But on the other hand, this window of opportunity might not present itself again."

On the legal side, she said, there remains a contradiction between the country's 2005 constitution, which gives the country's regions more say on oil deals, and the old legal framework, which favors Baghdad.

Violence is another concern. "The major uncertainty is whether Iraq's government will be able to guarantee a minimum level of security on the day the coalition troops leave the country," she said.

The U.S. government has tried to help Iraq rebuild its oil industry, strengthening infrastructure and providing training for a special corps of oil police who protect pipelines and other installations.

This summer, Iraq's oil production finally crawled back to its level before the 2003 invasion -- about 2.5 million barrels per day. But in recent months, it has slipped to about 2.3 million barrels because of poor weather, maintenance issues, and problems in a southern oil field caused by incorrectly injecting water to force out more oil, U.S. officials say.

Shahristani's goal is to increase Iraq's production to 4.5 million barrels a day by 2012.

U.S. officials believe foreign involvement in the industry is essential since most of the American money to rebuild Iraq's oil industry has now been spent. Iraq's own investments in the sector have been slowed by a sclerotic bureaucracy and other factors.

The government for the semiautonomous Kurdish region in northern Iraq has already signed its own investment deals with international oil companies, to the annoyance of the central government.

A member of parliament's oil committee, Abdul-Hadi al-Hassani, said Monday that it would insist on reviewing each of the foreign contracts before they were signed.

"If we see it is maximizing profits and merits to Iraq, we will accept," said Hassani, who belongs to a small Shiite party.