TN PETRÓLEO

The Iraqi government has revived a contract signed by Saddam Hussein`s regime allowing a state-owned Chinese oil company to develop an Iraqi oil field, the Iraqi oil minister told the Financial Times in Beijing Friday, according to a report on the FT`s Web site.

Iraqi Oil Minister Hussein al-Shahristani also said his government welcomed Chinese oil company bids for any other contract through a `fair and transparent bidding process` to be defined by a new oil law under discussion in Iraq`s parliament, FT reported.

China National Petroleum Corp. originally signed a deal with Iraq in 1997 to develop the al-Ahdab oil field, which is now one of the first to be offered to foreign investors since the 2003 U.S.-led invasion. The field had an estimated pre-war capacity of 90,000 barrels a day and the 1997 contract was valued around $1.2 billion.

While Iraq has been reluctant to revive Saddam-era contracts, it apparently has welcomed China as security problems and uncertainties over Iraqi investment law have deterred other investors, FT reported.

"The contract with the previous administration is still valid - it was signed and we will honor it," al-Shahristani told the FT. "We have been talking since I visited China eight months ago, and the Chinese have just submitted a revised proposal to meet the new technical requirements for oil field development laid out by the Iraqi government."

Al-Shahristani also said there were some technical details to work out but that the two sides would begin discussing revised commercial terms and price details "within one month," according to the FT.

U.S. diplomats in Beijing said they weren`t aware that the deal had been revived, the FT reported.