* Shahristani says bidding to be finished on schedule
* Committee’s Kurd chairman pledges to totally reject deals
(Recasts, adds quotes, background)
By Waleed Ibrahim
BAGHDAD, June 23 (Reuters) - Iraqi Oil Minister Hussain al-Shahristani defended to sceptical lawmakers on Tuesday plans to award the first major energy contracts since the 2003 U.S. invasion, saying Iraq stood to earn almost $2 trillion on them.
Shahristani said complaints from companies showed Iraq had hammered out a tough deal with regard to the eight oil and gas contracts due to be auctioned off on June 29-30, and rebuffed demands from lawmakers that they be approved by parliament.
The minister will return to parliament on Thursday, deputy parliament speaker Khalid al-Attiya said, giving lawmakers another opportunity to air criticism.
After the session, the minister said there was no chance the announcement of contract winners would be delayed or cancelled: “The opening of the offers will take place on schedule.”
Ali Hussain Balou, head of parliament’s oil and gas committee and a member of a Kurdish minority that has long assailed Shahristani’s management of the oil sector, pledged before the minister’s appearance to “totally reject” the contracts unless they were approved by parliament.
“We will not allow the Oil Ministry to move ahead, ignoring parliament and signing contracts in the first bidding round, since they are illegal and unconstitutional,” he said.
Lawmakers, in a session lasting several hours, asked the minister why he had chosen service contracts, which give foreign firms no share of production but pay them a fee.
Shahristani, who said the contracts would bring Iraq $1.7 trillion over 20 years, insisted over and over the deals were the best way to inject new life into Iraq’s ailing oil sector.
It is unclear whether parliament has the power to stop the Oil Ministry’s plan to conclude the bidding process, which will be Iraq’s first auction of prized oil resources to leading energy firms since the fall of Saddam Hussein.
Senior executives of the state-run oil sector have criticised the Oil Ministry for offering oilfields already in production rather than undeveloped fields, and for setting out terms they say will deprive Iraq of its due rewards.
“Is Iraq ready to take a gamble with these changes?” Shahristani asked.
Iraq’s oil reserves, the world’s third largest, offer hope for a country struggling to rebuild after more than six years of bloodshed and destruction triggered by the invasion.
But the tussle for control over the oil wealth has also pitted Arabs against Kurds and prevented the passage through parliament of modern hydrocarbon legislation.
The session underscored the fierce debate over how best to boost oil production of 2.3 million to 2.4 million barrels per day, below where it stood before the invasion.
They will have to pay Iraq $2.6 billion in signature bonuses and also have to carry Iraq’s 25-percent share of the development costs, which Baghdad will pay back over time in oil.
The semi-autonomous Kurdish authorities in the north have struck their own parallel energy deals with private firms but the Oil Ministry has rejected those as illegal.
Kurdish officials have warned in return that they might reject any contract the Oil Ministry issued to a private firm to develop the Kirkuk oilfields, a major oil-producing region that Kurds claim as their ancestral capital.
“If (Shahristani) dares to sign these contracts, he must assume responsibility for the consequences,” Balou said. (Additional reporting by Ahmed Rasheed; writing by Missy Ryan; editing by William Hardy)