UPDATE 1-Zambia selects firms to explore for oil -minister

* US, Canadian, British, locals firms to explore for oil

* Government to re-advertise 12 new oil blocs in 2010

(Adds details)

By Chris Mfula

LUSAKA, Nov 18 (Reuters) - Zambia selected seven of eight foreign and local firms that submitted bids to explore for oil in three provinces of the southern African country, mines minister Maxwell Mwale said on Wednesday.

Zambia invited bids for oil exploration in June after demarcating 23 oil blocks in its Northwestern, Western and Eastern provinces.

Mwale said in a statement GP Petroleum and Petrodel Resources from the UK, Glint Energy from the United States and Exile Resources (ERI.V) from Canada had been selected along with Zambian firms Majetu, Barotse Petroleum Company and Chat Milling Company Ltd.

Mwale did not specify the blocs the companies would be awarded.

"The ministry of mines and minerals development shall now proceed to award petroleum exploration licences to the successful bidders. The successful bidders should commence petroleum exploration activities immediately," Mwale said.

Mwale said 12 of the 23 oil blocks would be advertised together with new blocks that had been demarcated in Northern, Luapula and Southern provinces and the next bidding round would close at the end of June 2010.

The successful bidders needed to demonstrate proven ability to raise the funds required for the projects, and also show they have assets, machinery, technical expertise, equipment and tools required to explore, produce and sell oil.

The bids were initially scheduled to close in August but the government extended the tendering period to allow more companies to submit bids.

Zambia, which relies on copper mining for most of its foreign exchange earnings, does not produce oil, but the government says soil samples sent to European laboratories, have shown good traces of oil, particularly in areas bordering oil-producing Angola. (Editing by Sue Thomas)