Iraq's oil directed away from US.

Bad news for Bush..

Iraq will award contracts to 41 foreign oil firms in a bid to boost production that could give multinationals a potentially lucrative foothold in huge but underdeveloped oil fields, an official said on Sunday.

"We chose 35 companies of international standard, according to their finances, environment and experience, and we granted them permission to extract oil," oil ministry spokesman Asim Jihad told AFP.

Six other state-owned oil firms from Algeria, Angola, Pakistan, Thailand, Turkey and Vietnam will also be awarded extraction deals, Jihad said.
The agreements, to be signed on June 30, are expected to be short-term arrangements although the ministry has yet to provide a timeframe.

The deal paves the way for global energy giants to return to Iraq 36 years after late dictator Saddam Hussein chased them out, and is seen as a first step to access the earth's third largest proven crude reserves.

"They will have the first right to develop the fields," said Jihad, adding that competitive bidding would come later once the nation's long-delayed hydrocarbon law is passed by parliament.

Iraq wants to ramp up production by 500,000 barrels per day from the current average production of 2.5 million barrels per day (bpd), a level about equal to before the US-led invasion in March 2003.
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