Oil firms Nippon Oil of Japan, Eni of Italy and Repsol of Spain are competing for a contract to help develop southern Iraq's Nassiriya oilfield, an oil ministry official said.

The official, who asked not to be named, said the three companies had submitted offers for an engineering, procurement and construction contract to the Iraqi Oil Ministry, which will evaluate them and select the most competitive.

The field is not among 19 oil and gas fields that the country put up for bidding to international firms for service contracts in two rounds last year.

Iraq, with the world's third largest reserves, depends on oil for nearly all state revenue. But its output has declined because of decades of sanctions and war, and it is in desperate need of investment to fix its crumbling infrastructure and develop new output.

Last year China's Chinese National Petroleum Corporation (CNPC) became the first foreign oil firm to begin a project in Iraq since Saddam Hussein nationalised the industry decades ago.-Reuters