Iraq is due to announce which of 31 foreign and state-owned bidders have won deals to operate six major oil fields and two gas fields, for which the government will pay fees rather than share profits, on June 29 and 30.

The Iraqi oil ministry and Kurdistan, however, are at loggerheads over how international companies involved in the tapping of the nation's vast energy reserves should be paid.

Iraq's decision to award service contracts differs from Kurdistan, where numerous profit-sharing deals have been struck.

A statement issued by the Kurdish government said Baghdad's policy was "unconstitutional and against the economic interests of the Iraqi people."

"The regional government of Kurdistan has made clear progress in increasing Iraq's oil exports and oil revenues in a short time," it said.

"This progress has been made by focusing on exploration and not on existing fields, in line with the best practices of international markets, and in accordance with the principles of the Constitution of Iraq.

"The regional government regrets that it cannot say the same thing on the procedures taken the Federal Ministry of Oil of Iraq," the statement added.

Article 109 of Iraq's constitution says that oil and gas resources must be developed "in a way that achieves the highest benefit to the Iraqi people," in a way "consistent with market principles and that best encourages investment."

Iraq's Oil Minister Hussein al-Shahristani has been accused of taking an ultra-nationalist approach, possibly deterring investment, by insisting that oil wealth -- meaning profits -- cannot be shared with foreign companies.

He has also come under criticism from MPs who accuse him of mismanagement resulting in 10 billion dollars in lost revenue for a federal budget that is projected to go into deficit.

The service agreement shortlist was first announced by Baghdad in June 2008 and includes global energy giants Exxon Mobil, Royal Dutch Shell, Chevron and Sinopec, as well as large Iraqi state-owned operators.

The oil ministry has since repeatedly delayed announcing the bid winners.

Although Iraq has the world's third largest proven reserves of oil after Saudi Arabia and Iran, development of the conflict-ravaged country's fields has been very slow.