Next Iraq government may alter oil deals: lawmaker

BAGHDAD (Reuters) - International oil companies signing deals with the Iraqi government are taking a big risk as the next government, to be elected in January, may revise or cancel those contracts, a senior lawmaker said on Monday.

"Oil companies, which expect to invest billions, should take into consideration the big risk behind these contracts. The new government will at a minimum alter the contract terms and that will not make the oil firms happy," Ali Hussain Balou, head of parliament's oil and gas committee, told Reuters.

"There are no guarantees for the oil companies that the new government will follow the same path in dealing with them. These contracts might be canceled or at the very least revised," said Balou, a Kurdish lawmaker and sharp critic of Iraq's oil policy.

Iraq's cabinet last week approved a deal for BP (BP.L: 行情) and China's CNPC to develop the country's workhorse oilfield, Rumaila -- the first contract to emerge from a landmark auction of oilfields in June and Iraq's first major new oil contract since the 2003 U.S. invasion.

The auction, and a second round in December, are aimed at more than tripling Iraq's current output of 2.5 million barrels per day as it desperately seeks the billions of dollars it needs to rebuild from decades of war and sanctions.

The BP deal was the only one to be successfully negotiated in the first round of tenders in June. But subsequent talks are near to clinching deals with ENI (ENI.MI: 行情), Exxon Mobil (XOM.N: 行情) and others after Iraq's oil ministry sweetened its terms.

If all the deals being negotiated come together, Iraq will catapult itself to third place among oil producers compared to 11th now, and upset the current balance of power among Middle East oil states.

Balou criticized the way the deals were being negotiated behind closed doors. In contrast, the auction in June was broadcast live on Iraqi television.

"At the beginning these contracts were launched publicly, but later on they were shrouded by secrecy in dark rooms," he said.

He also warned that the Organization of Petroleum Exporting Countries was unlikely to allow Iraq to remain exempt from export quotas once it became a major crude producer.

"...The current oil minister and the government backing him should understand that OPEC states will not allow Iraq to flood the market," he said. Balou added he expected Iraq's exports to be capped by OPEC at 3 million barrels per day compared with the 7 million bpd the government is aiming for.

(Reporting by Ahmed Rasheed; Editing by Michael Christie)