'The Iraqi government offered a profit margin of $1.90 per barrel at the West Qurna field. Total ended up bidding without Chevron and asked for a profit margin of $7.50 per barrel. Spanish oil company Repsol also submitted a bid and wanted $19.30 per barrel. No one got the job.
"Maybe there's a little bit of a learning curve on both sides about what's realistic," said Amy Myers Jaffe, an energy research fellow at Rice University's Baker Institute. "Instead of looking at it as a failed tender, people should look at it as the beginning of a negotiation."
The stakes on both sides are high.
Iraq has the world's third-largest reserves of oil - 115 billion barrels. Petroleum exports supply 86 percent of the government's revenue, according to the U.S. Energy Information Administration. But Iraq's state-run oil industry has suffered from years of war, international sanctions and insurgent sabotage.
Before the American-led invasion toppled Saddam Hussein in 2003, the country pumped about 2.8 million barrels per day. Now it's 2.4 million. The Iraqi government wants to expand production, hitting 6 million barrels a day within 10 years. But it will probably need foreign investment and expertise to reach that goal.
For international oil companies, Iraq could be a bonanza. But the country remains unstable, with a fractious government and a simmering insurgency. And the politics surrounding its oil reserves are a minefield.'