By Stephen Jewkes
RAVENNA, Italy, March 20 (Reuters) - OPEC member Iraq'sfifth licensing round for oil exploration will be held in thenext few months and will come from 10 oil blocks, its oilminister said on Wednesday.
Iraq, which has some of the world's largest oil reserves, ispushing hard to develop the industry, shattered by years of warand instability.
"In the next few months there will be the fifth licensinground," Iraqi oil Minister Abdul Kareem Luaibi said at anindustry conference in Italy.
Luaibi also said the country's cabinet energy committee hadapproved an initial agreement with oil major BP toupgrade the Kirkuk oil field.
"It has been approved. Negotiations can now continue," hetold Reuters.
Iraq revealed a preliminary agreement with BP in January torevive the giant but ageing northern Kirkuk oil field which issuffering massive output declines.
Iraq's fourth energy auction ended last year with fewforeign investors tendering bids.
This could force Baghdad to ease tough contract terms tolure more oil explorers into a new bidding round that shouldfocus on gas, while the oil will be used to boost reserves.
"In previous contract awards no importance was given to gas.We have now started a major project to develop gas," Luaibisaid.
Baghdad's less attractive service contracts combined with arecent boom in natural gas supplies and gas finds elsewhere inthe world may have further quashed investor interest in a trickygas prospect like Iraq.
Violence in Iraq has eased since the height of the war,though security remains a concern, especially in more remoteareas where some of the auctioned gas blocks are located.
Companies entering new deals also weighed risks from Iraq'scontinued political instability against the potential gas andcrude developments on offer in the bidding, which are mostly inwestern and central Iraq.
"There will be amended contracts that will be very alluringfor the IOCs," Luaibi said, referring to the new licensinground.
At the Ravenna meeting Luaibi had a one-to-one meeting withPaolo Scaroni, the chief executive of Italian major Eni whichoperates the Zubair oil field near Basra. Both men declined tocomment on the meeting.
A group led by Eni is in final talks with Iraq to cut theproduction target of Zubair oilfield to 1 million barrels perday (bpd) from 1.2 million bpd, head of the state-run South OilCo. told Reuters in January.
Scaroni said the group was not in talks to find anotherpartner to help develop its Zubair field.
Eni, U.S.-based Occidental Petroleum Corp and SouthKorea's KOGAS signed a 20-year deal with Iraq in 2010 to developZubair, whose production is currently at around 270,000 barrelsper day.
The consortium is expecting to invest $18 billion in theZubair oilfield.