Iraq opened bidding Monday on the first round of contracts to develop its oil fields since the fall of Saddam Hussein, a move intended to jump-start a sector crucial to the country's rebuilding.Oil fields have been looted and attacked by insurgents since the 2003 U.S.-led invasion, technical experts have fled abroad because of violence and the infrastructure is creaky after years of international sanctions and neglect. Iraq needs billions of dollars of investment to increase production, experts say. "Current production is by no means meeting demand for the reconstruction of the country," Iraq's oil minister, Hussein al-Shahristani, told reporters after meeting Monday in London with representatives of three dozen international oil companies. "International companies are needed to fast-track development. The response was fairly encouraging."
Vera de Ladoucette, director of Middle East research for Cambridge Energy Research Associates, noted that the first round of bidding involves fields representing a third of known Iraqi oil reserves. "It's a huge step," she said.
Shahristani presented the oil companies with requirements for their bids on 20-year contracts to develop six major oil and two natural gas fields. Bids are due in six months and the government is expected to choose the winners in June, he said. Oil analysts estimate the contracts will lead to increases in production by 2011 or 2012.