Iraq says it has rejected new offers from foreign companies to develop the country's oil and gas fields, after an international tender Tuesday produced only one deal.

Iraqi government spokesman Ali al-Dabbagh speaks during a press conference in Baghdad, Iraq (File)

Government spokesman Ali al-Dabbagh says the offers were rejected Wednesday because the firms did not agree with the fees Iraq is willing to pay them for extracting oil and gas.

The spokesman also says Iraq's Cabinet approved a contract awarded Tuesday for Britain's energy company BP and the China National Petroleum Corporation to develop its massive Rumaila oil field.

The contract was the only deal sealed in an auction aimed at attracting foreign investors back to Iraq.

The country had hoped to award contracts to six oil fields and two natural gas fields.

Iraq has the world's third-largest known oil reserves, a critical source of income for a country struggling to rebuild from years of war.

The head of the International Energy Agency's oil markets division, David Fyfe, said Tuesday that administrative barriers likely would limit Iraq's oil production for a few years.

Iraq hopes to more than double its current daily output of 2.4 million barrels.

Tuesday's auction was the first international tender since the oil industry was nationalized in 1972.

Some information for this report was provided by AFP, AP and Reuters.