UPDATE 1-Iraq accepts 35 of 120 firms to bid for oil deals

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By Ahmed Rasheed

BAGHDAD, April 13 (Reuters) - Iraq has so far accepted 35 companies to compete for future oil and gas contracts from 120 companies that entered the process to qualify, a government spokesman said on Sunday.

Iraq holds the world's third-largest oil reserves and needs billions of dollars of investment to overhaul infrastructure and boost oil and gas output after years of sanctions and war.

A vital oil law to establish the framework for foreign investment has been stalled for a year by political feuding. As stop-gap measures to boost output until the law is in place, Iraq plans to issue oil extraction and service contracts.

"Up to now, 35 companies have been qualified out of 120 companies that presented their documentation to the oil ministry," government spokesman Ali al-Dabbagh said at a press conference.

The process was ongoing, and some companies that had failed to submit all the documentation necessary would be given the chance to complete their paperwork, he added.

Dabbagh did not give details on qualified companies, nor say if any had been disqualified.

Baghdad has said that companies that had done deals with the semi-autonomous Kurdish region in northern Iraq would not be allowed to bid for contracts in the rest of the country. Baghdad claims the Kurdish deals are illegal.