A BP consortium has won Iraq's first oil and gas field contract amid widely differing expectations between government and oil companies, Press TV reported.
According to the Iraqi government, under the 20-year contracts, the companies would be paid a fee of $2 per barrel for any crude they produce in excess of a minimum production target.
The first oil and gas field up for auction was for the biggest field al-Rumaila, which at present produces 950,000 barrels per day (bpd).
Two consortiums, the British giant BP and Exxon Mobil, submitted their offers for the largest prize on offer with 17.8 billion barrels in crude reserves.
The Exxon Mobil-led consortium, which included Malaysia's Petronas, requested $4.80 per barrel, while BP put the tag at $3.99 per barrel.
Exxon Mobil refused to revise its bid, while BP agreed to match the ministry's $2 per barrel price and won the contract for al-Rumaila.
All the offers presented to the Iraqi Oil Ministry surprised the ministry officials as they claimed that they would be able to raise production, Oil Minister Hussain al-Shahristani told reporters during a news conference following the auction.
For example, he said, the production of al-Rumaila oil field - one of the biggest oil fields in Iraq - is 950,000 bpd at present, but the new offer will raise the production to 2,850,000 bpd.
Years after Saddam's removal was supposed to unleash Iraq's oil potential, the auction marked the first big moment for the Oil Ministry, which is under pressure to boost the disappointing output of around 2.4 million bpd.
Al-Shahristani added that the ministry was looking to increase the oil output of the six oilfields to 4 million bpd through the development of six oilfields and two gas fields, "but we will reach this figure just by the production of al-Rumaila oil field, in addition to the recent production of the other oil."
The Oil Ministry failed to find takers for another huge field, Kirkuk, and for the smaller Bai Hassan, Maysan and Zubair fields, after Chinese, Italian, British, and US-led consortia rejected its terms and demanded a much higher fee for each extra barrel produced than the Iraqis were willing to pay.
No bids were received for Iraq's Mansuriyah gas field and no deal was agreed on the Akkas gas field, al-Shahristani said.