China's Sinopec Corp sought to pay participation fees to bid for oilfields on offer in Iraq's second bidding round but was rebuffed, an official with the Iraqi Oil Ministry said on Sunday.

"Sinopec asked to pay the participation fee to get the data package but we refused due to the deals they have with the Kurdish Regional Government," said Sabah Abdul Kadhim, head of the legal and commercial section of the Petroleum Contracts and Licensing Directorate.

Abdul Kadhim said more than 40 global oil firms ended up paying participation fees ahead of the November 20 deadline for the December 11-12 auction, in which 10 largely undeveloped oilfields will be up for grabs.

"Those who paid the participation fee will be the only companies entitled to bid for the fields offered in the second bidding round," he said.
 The participation fees range from $250,000 to $500,000, depending on the field to be bid on. Forty-five companies prequalified for the oil auction, the second since the 2003 US-led invasion.

Only one deal initially emerged from the first auction in June after oil majors balked at the stiff terms Iraq was prepared to offer. But subsequent negotiations have led to agreements on a series of major oilfields that could catapult Iraqi into third place in the league of oil-producing nations and deliver it the billions of dollars it needs to rebuild.

Sinopec has been barred from the second round because of its purchase of Swiss oil explorer Addax Petroleum Corp, which had signed deals with the semi-autonomous Kurdish authorities, or KRG, in northern Iraq.

The KRG and the Arab-led government in Baghdad are at loggerheads over a range of issues, including oil. The Oil Ministry considers deals signed by the KRG with oil firms to be illegal.

"Our position is clear. We will not deal with any oil companies that sign contracts with the KRG without the approval of the central government," Abdul Kadhim said. - Reuters