Iraq and a BP Plc-led group may sign a contract to develop the Rumaila oil field in about two weeks, earlier than planned, after the holder of the third-largest oil reserves approved the bid, a government official said.

    The June 30 award was approved yesterday by the government, Abdul Mahdy al-Ameedi, deputy director general at Iraq's Petroleum Contracts and Licensing Directorate, said by telephone today. Contracts for the licensing round were to be signed in August, according to a schedule on the Directorate Web site.

    Iraq failed to award most contracts offered in an auction aimed at attracting foreign partners to help develop its oil and gas fields. It seeks to more than double output to 6 million barrels a day by 2015 and may develop some of the fields not awarded on its own, spokesman Ali al-Dabbagh said yesterday.

    "The fields are already producing now and the local companies claim they can develop them,"said Leila Benali, director of Middle East and Africa at Cambridge Energy Research Associates in Paris. "If they really want the 6 million they've mentioned that's more difficult. They'd have to develop new fields and get foreign help."

    Second Round

    BP spokesman Toby Odone declined to comment on when the contract would be signed. The company and partner China National Petroleum Corp. won rights for Rumaila, the largest of eight fields in the bidding round and the only one awarded. Iraq rejected 14 bids as companies sought higher compensation than the government was willing to pay.

    The country plans to hold a second licensing round before the end of the year, al-Ameedi said. The government moved up the auction date from the first quarter of 2010, he said.

    The third-largest OPEC producer is struggling to raise output and oil revenue after six years of conflict and prior sanctions battered the economy and infrastructure. The government is seeking to raise oil output to 4 million barrels a day within five years, using extra output from the fields in the round, from about 2.4 million barrels now.

    The BP-led group agreed to increase output at Rumaila, which produces 956,000 barrels of oil a day, to a plateau of 2.85 million barrels of oil a day. BP won the bid after lowering its cost recovery to $2 a barrel from an initial remuneration fee of $3.99 a barrel.

    Potential bidders in the second licensing round, the 35 companies pre-qualified for the auction and another nine admitted later, will be invited to discuss the fields and contract terms at a workshop in Istanbul at the end of August, al-Ameedi said. Another workshop will be held in November, likely also in Istanbul, with model contracts presented after, he said.

    In separate bidding for engineering contracts for the Nassiriyah oil field, Iraq asked Eni SpA, Italy¡¯

s largest energy company, and Nippon Oil Corp. for revised technical and commercial bids, al-Ameedi said. Repsol YPF SA is no longer in the running for the contract, he said.