Iraq Opens Oil, Gas Fields to Foreigners

Updated from 4:08 a.m. EDT

By Sinan Salaheddin

BAGHDAD -- Iraq opened up some of its massive oil and gas fields to foreign companies on Tuesday, kicking off a landmark licensing round it hopes will help fuel its postwar reconstruction efforts.

In a televised ceremony, international oil companies were invited to submit bids for six oil and two gas fields, a process that marked their return to the country over 30 years after Saddam Hussein nationalized the oil sector and expelled the foreign firms.

The licensing round coincided with Iraq's assuming formal control over its cities -- a defining step toward ending the combat role of the U.S. in the country. That has raised worries about a new escalation of violence that could complicate business for oil companies, already concerned about some lawmakers' objections to the bidding process.

Iraqi Prime Minister Nouri al-Maliki sought to allay companies' concerns, telling executives from the more than 30 international firms vying for the 20-year service contracts that the government would do all it can to secure their interests.

Al-Maliki said the government would "offer security protection, offer all guarantees for their investments and offer all the facilities needed to ensure the success of this process."

The fields on offer hold about 43 billion of Iraq's 115 billion barrels of crude reserves -- among the largest in the world.

The process seemed to run into difficulties for the first two fields on offer.

Two consortiums submitted offers for the Rumaila oil field, which holds 17.8 billion barrels in crude reserves. British giant BP (BP Quote) and China's CNPC made up the first consortium while U.S. giant Exxon Mobil (XOM Quote)and Malaysia's Petronas comprised the second.