Royal Dutch Shell today won a contract in an historic auction to develop a major Iraqi oil field.

Iraq opened up some of its massive oil and gas fields to foreign firms today, kicking off a landmark licensing round it hopes will help fuel its post-war reconstruction efforts.

FALLING global demand will push the cost of oil down significantly in the year ahead.

Four suicide bombers struck communities of a small Kurdish sect in north-western Iraq, killing at least 200 people and wounding 300 more, Iraqi military and local officials said.

More than 50 gunmen dressed in Iraqi security forces uniforms broke into an oil ministry compound in Baghdad today and abducted a senior deputy of the oil minister and four other officials, a ministry spokesman and police said.

Iraq’s oil production has reached an average of 2.5 million barrels per day, its highest level since the US-led invasion, a spokesman said today.

US CRUDE oil futures ended more than a dollar higher yesterday as analysts warned the death of Iraq’s al-Qaida leader Musab al-Zarqawi on Thursday would not end threats to Iraq’s battered oil industry.

Insurgents assassinated a Kurdish member of parliament and police found 20 bodies shot to death and dumped in the Tigris River 50 miles north of the capital, where there was no major violence for the first time in five days.

IRAQI negotiators finished the country's new constitution yesterday without the endorsement of Sunni Arabs who helped prepare it, dealing a blow to the Bush administration.

The Shiite-dominated government of Prime Minister Ibrahim al-Jaafari received a vote of confidence today in the Iraqi National Assembly.

Talks on who would get what in Iraq’s newly-elected National Assembly were underway today but the clergy-backed Shiites, whose winning margin was smaller than they expected, may now have to compromise more than anticipated.

Four key nations have proposed major changes to the US-British draft resolution on Iraq that would give the country’s new government control over the Iraqi army and police and require the multinational force to consult on military actions except for self-defence.

Radical cleric Muqtada al-Sadr has agreed to withdraw his militia from Najaf and hand the city back to Iraqi police, the government said, raising hopes for an end to weeks of fighting with coalition forces.

THE United States has proved “bankrupt of vision and bereft of principle” in its fight against terrorism and invasion of Iraq, Amnesty International charged.

A Shiite Muslim nuclear scientist is among those being considered for Iraq’s prime minister, officials said today as UN and US envoys and Iraqi leaders poured over names to fill the 30 top spots in the next government.