Iraq threw open the world's third largest oil reserves to foreign firms on Monday, putting British and US companies in poll position.
The move, coming five years after US-led troops invaded the country to oust Saddam Hussein, marks the return of the oil majors, whose cash and technical knowhow Iraq needs to restore its oil infrastructure that has been hard hit by sanctions and war.
But any awards to US and British companies are likely to anger opponents of the invasion, who have said the 2003 war was designed to control Iraqi oil reserves and serve Western oil companies. US and British officials have denied the charges.
By allowing international firms to invest and explore its oil fields, the Iraqi government is breaking with the policy of major oil-producing neighbours like Saudi Arabia, Kuwait and the United Arab Emirates whose national firms keep tight control of foreign investment in their oil sectors.
"The six oilfields that have been announced today are the backbone of Iraq's oil production, and some of them are getting old and production is declining," Oil Minister Hussain Al-Shahristani said.
The fields to be developed are Rumaila, Kirkuk, Zubair, West Qurna Phase 1, Bai Hassan and the Maysan fields. Maysan comprises three fields, Bazargan, Abu Gharab and Fakka.
The Oil Ministry said they are open to foreign firms for long-term development contracts. It said last week it hopes to sign six short-term oil service contracts during the next month.
Taken together, the short-term and long-term contracts will open the door to major international involvement in the Opec member's oil sector for the first time in nearly four decades.
The majors have been positioning for years in the hope of eventually gaining access to Iraq's proven reserves, which at 115 billion barrels are the world's largest after Saudi Arabia and Iran.
Deputy Prime Minister Barham Salih said in April that reserves could be as much as 350 billion barrels. Al Shahristani announced the list of fields open for long-term contracts at a news conference in Baghdad. The government has already pre-qualified 41 foreign firms to bid for the contracts.
Two gas fields, Akkas and Mansuriyah, were also opened.
"We feel it is very important for Iraq to arrest any decline and increase production," he said, adding he hoped to sign the deals in June 2009.
The Oil Ministry said last week it had finished negotiations with oil majors on six separate short-term oil service contracts and hoped to sign those deals during the next month.
The short-term deals, each worth about $500 million, are aimed at quickly lifting output at Iraq's largest producing fields by a combined 500,000 barrels a day. Iraq's current oil production is around 2.5 million bpd. Five of the short-term deals that have been under discussion are with Royal Dutch Shell, Shell in partnership with BHP Billiton, BP, Exxon Mobil and Chevron in partnership with Total.
Iraq has also been in talks with a consortium of Anadarko, Vitol and Dome for a sixth short-term contract. Those talks on the short-term deals have given the majors a head start in efforts to bid for future oil contracts.
In terms of the short-terms contracts, Shell negotiated for the northern Kirkuk oilfield and was also in talks on the Maysan fields, Iraqi officials have said. BP has its eyes on the southern Rumaila field, while Exxon wants the contract for the Zubair oilfield in southern Basra province.
And Chevron and Total were looking to work together to develop West Qurna, also in Basra. But many Iraqis still bear a grudge after British, American and French oil companies controlled their oil industry for half a century through the Iraq Petroleum Co (IPC).
It was an era when Western majors working in the Middle East used oil output and prices as an economic and political tool, analysts said.
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