Iraqi oil licensing round runs into trouble

BP agreed to match the ministry's price and won the contract for Rumaila, said al-Shahristani. Exxon Mobil had refused to revise its bid, he said.

No bids were offered on the second field on offer, Mansouria.

The field, located in the restive Diyala province, is an undeveloped gas field estimated to hold 3.3 trillion cubic feet of reserves with production potential of 330 million cubic feet a day. That province has weathered some of Iraq's worst violence.

The third field offered, the 2.4 billion barrel Bai Hassan field in the Kirkuk region in the north, drew interest from only one consortium grouping ConocoPhillips and China's CNOOC Ltd. The companies bid $26.7 per barrel for production over the minimum target of 230,000 barrels per day, while the ministry had estimated per barrel payments of about $4.

Al-Shahristani said they were asked to revise their bids.

Sabah al-Saidi, the oil ministry's legal adviser, told The Associated Press that the ministry was not willing to be flexible about the price it was seeking, and that any fields not awarded Tuesday would be re-offered at later rounds.

Iraq has not passed a new hydrocarbon law and some lawmakers have complained that al-Shahristani's insistence on sidestepping the parliament and having the cabinet of ministers ratify the deals will render them unconstitutional.

Iraqi officials have estimated that based on crude oil at $50 per barrel, the companies could earn around $16 billion in total. Iraq, meanwhile, would get over $1.7 trillion.

As part of the contracts, the companies have to provide so-called "soft-loan" signature bonuses to the government that total about $2.6 billion.

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