June 28 (Bloomberg) -- Iraq, holder of the world’s third- largest crude reserves, delayed by one day its first award of oil contracts to foreign companies in more than three decades as sandstorms forced the Baghdad airport’s closure.

The contract awards, scheduled to last two days, will begin June 30 instead of tomorrow, Oil Ministry spokesman Asim Jihad said by telephone today. The storm prevented representatives of bidding companies from arriving in the capital, he said.

Eight of the world’s top 10 non-state oil producers, including Exxon Mobil Corp. and Royal Dutch Shell Plc, are vying for the right to help Iraq develop six oilfields and two natural-gas deposits. More than 30 companies in total are bidding for $16 billion worth of technical service contracts.

OPEC’s third-largest oil producer is seeking to raise crude output to 4 million barrels a day after the award of the contracts this week, from about 2.4 million barrels now, Oil Minister Hussain al-Shahristani said. The government aims to increase that to 6 million barrels a day by 2015 after a second licensing round helps the country’s oil industry recover from six years of conflict proceeded by sanctions that destroyed its economy and infrastructure.

Al-Shahristani last week assured potential investors the bidding would go ahead as scheduled after parliament and current and former officials in the Iraqi oil industry called for the round to be scrapped. Prime Minister Nuri al-Maliki’s government has been criticized by lawmakers for failure to raise oil production faster and over fears the deals proposed won’t benefit Iraq.

Foreign oil companies will get a fee for developing deposits without taking stakes in any fields. In 1972, Iraq nationalized concessions owned by companies now known as BP Plc, Shell and Exxon.

To contact the reporter on this story: Robert Tuttle in Doha, Qatar at rtuttle@bloomberg.net; Anthony DiPaola in Dubai at adipaola@bloomberg.net.

Last Updated: June 28, 2009 08:39 EDT