Iraq is still negotiating with Japan's Nippon Oil Corp and ENI of Italy over the huge Nassiriya oilfield, Iraqi oil officials said Wednesday, contradicting a Japanese report a decision had been made.

Deputy Oil Minister Ahmed al-Shamma said bids from both companies had been submitted to the Iraqi cabinet for consideration but no decision was likely until the firms responded to some questions on financing.

'We can't decide which offer is best unless we receive contract amendments both Nippon and ENI promised to submit. These amendments will change the situation,' Shamma said.

A Japanese newspaper reported last week that Nippon Oil and its partners were in the final stage of talks to win the $10 billion development contract for Nassiriya.

Nippon Oil is competing for the contract together with top oil explorer Inpex Corp and plant engineering firm JGC Corp. Italy's ENI and Spain's Repsol were invited by Iraq to bid for the engineering, procurement and construction deal (EPC). Repsol is viewed as no longer in the running.

The EPC deal is unrelated to Iraq's auction on Tuesday of development contracts for six producing oilfields and two undeveloped gas fields.

Its first major oil and gas auction since the 2003 US-led invasion, the sale was viewed by many energy firms as a flop after the Oil Ministry secured only one deal.

Officials have said in the past that Nassiriya could produce 100,000 bpd within 18 months, while ENI estimated it might eventually pump up to 1 million bpd.

The Nassiriya contract was initially scheduled to be awarded in late April or early May, but was delayed as Iraq asked for  bids to be revised and resubmitted.

Once resubmitted, the bids were passed to the cabinet.

Shamma said the latest amendments Iraq was seeking referred to financial aspects of the contracts. 'We are still discussing means of payment with both companies. Both ENI and Nippon are asking for a certain means of financing and we are still studying which one is best for us.' Abdul Mahdy al-Ameedi, the deputy director general of the directorate for contracts and licensing, said more talks were needed with both ENI and Nippon.

'The Oil Ministry is determined to conclude this deal, but it's important to have contractual terms that benefit our interests,' he said. - Reuters