China’s state-owned oil companies are eyeing a second round of auctions of major untapped oil and gas fields in Iraq later this year, but commercial terms are still key, said top executives with the companies.

“We need to see the Iraqi government’s offer first…we may continue participating in the second round,” Cnooc Ltd. Chairman Fu Chengyu said last weekend.

Wang Tianpu, president of China Petroleum & Chemical Corp., or Sinopec, also said recently that the company’s parent Sinopec Group will keep a close eye on Iraq’s second licensing round.

The auctions will feature 10 oil fields and one gas field, including the super-giant West Qurna phase 2.

“Of course we will pay close attention (to the second round)…the central government has been encouraging us to tap overseas resources,” Wang said.

State-run China Daily reported Tuesday that all China’s three state-owned oil majors — Cnooc Ltd., Sinopec Group and China National Petroleum Corp. — are considering participating in the second round later this year.

Domestic oil companies won’t miss the opportunity to tap rich oil and gas reserves in Iraq, but may choose to form partnerships with foreign companies to reduce risks, the paper said, citing a source it didn’t identify.

On June 30, Iraq held the country’s first round of bidding in 30 years to develop some of its massive oil and gas fields, but only contract was awarded, to a consortium led by BP PLC that included CNPC.

Other international oil companies, such as Exxon Mobil Corp., ConocoPhillips and Italy’s Eni SpA, walked away from the bidding round this week, saying the ministry’s terms — in some cases limiting revenue to as little as $2 per barrel of oil pumped — weren’t acceptable.

Cnooc rejected the terms laid down by the ministry to operate the country’s Missan oil field at $2.30 for each extra barrel produced. It sought $21.40 a barrel.

Sinopec Group and Cnooc teamed up with Conocophillips to bid for the Bai-Hassan oil field, but the consortium turned down Iraqi’s offer of $4 a barrel of oil produced. It wanted $26.70 per barrel.

Iraq’s oil ministry will hold a meeting in August to brief international oil companies on its second licensing round to award long-term oil and gas field service contracts, a senior ministry official said Friday.

The ministry is also considering whether to include the remaining fields from the first round in the second round bidding as well.

(Dow Jones & Rigzone)