That could be good news with the price for a barrel of oil breaching $143 for the first time on Monday. But the contracts won't be signed for a year, and if Western firms win a dominant role, it could feed perceptions that U.S.-led forces toppled Saddam Hussein to get at Iraq's natural resources.
Those concerns were heightened by expectations that Iraq would announce short-term no-bid consulting contracts with five Western oil firms on Monday. The New York Times reported about two weeks ago that the firms were Royal Dutch Shell, BP, Exxon Mobil Corp., Chevron Corp. and Total.
But Oil Minister Hussain al-Shahristani said at a news conference Monday that the Iraqi government was still negotiating with the companies, which he did not identify. He said the firms were demanding a share of oil production while Iraq wants to pay in cash.
The minister said the short-term contracts were meant to boost production until the government awards longer-term deals next June. But some believe the consulting contracts could give the winning firms an advantage in bidding for the development contracts, which al-Shahristani said Monday would include 35 foreign companies.
The firms he named included seven from the U.S., three from Britain and others from Russia, China and other countries.
He said even the longer-term contracts would include cash compensation and not a share of oil production.
