By Lennox Samuels

Iraqi oil minister Hussain Al-Shahristani was expecting to score a second triumph on the day American combat troops withdrew from his nation's cities. But by the time bidding to develop eight Iraqi oil and gas fields ended, he had only one potential deal in hand. Shut out of Iraq's hydrocarbon industry for more than three decades, foreign oil companies nevertheless declined to pursue development contracts that were seen to be advantageous to Iraq, but not so good for them.

BP and CNPC of China agreed to produce oil at the 17-billion-barrel Rumaila field, accepting the government's offer of $2 a barrel for each additional barrel the consortium extracts. The joint venture had sought $3.99 a barrel. Reps from other companies, including Exxon, Shell and 30 others from 18 countries sat impassively, apparently underwhelmed by the potential payoff. Shahristani made clear that Big Oil would be paid a flat fee for their efforts and would be allowed no ownership stake in any field.

For some, the government's posture was hubris. Analysts said Shahristani provided oil companies little incentive to bid, asking companies to spend heavily on development for very little return. "They clearly went too far in not allowing any kind of reasonable profit," said Sam Ciszuk, an energy analyst with IHS Global Insight Middle East, in London. "There are huge risks - not only financial, but legal and political."

And life-threatening, he could have added. A just-released United Nations report states that most of Iraq's oil fields are mined. The Ministry of Defense bans non-military de-mining operations, meaning the oil companies will not be able to use civilian contractors to clear any land mines. "One wonders whether oil companies actually thought about this issue at all," a U.N. official told NEWSWEEK. "It might take years before they even set foot on the fields.

The companies' cool response could put a damper on Iraq's economic-development plans, which hinge on oil. Dependent on crude, Iraq has seen its budget decrease as per-barrel prices have dipped. The loss in revenue even threatens funding for the Army and National Police, which have inherited responsibility for security in urban areas with American combat forces gone. "They need to learn to make better deals," says a Western consultant to the Maliki government, who spoke on condition of anonymity.

Shahristani said he expected production on the eight fields to yield $1.7 trillion over 20 years. But the Western companies would realize only a fraction of that. Given the lack of enthusiasm, the oil minister ended Tuesday's session early. Matters could get worse still: Even the BP/CNPC is no sure thing. No contracts have been signed and there's no guarantee that the deal will go forward, Ciszuk told NEWSWEEK. "Nobody's popping champagne corks in London," he said.

At the opening of the session at Al-Rasheed Hotel, Prime Minister Nuri al-Maliki was bullish. "Today we - Iraq, the Iraqis - and the entire world will witness a round which might be unique of its kind in the region," he stated. It appears he and his cabinet should not count their oil barrels before they are filled.