UPDATE 1-EXCLUSIVE-Iraq to pay oil firms to boost its output

(Updates throughout with context)

By Randy Fabi and Ahmed Rasheed

BAGHDAD, March 19 (Reuters) - The Iraqi government is expected to pay up to $2.5 billion to five top oil companies to increase the country's oil output by nearly a quarter, a government adviser told Reuters on Wednesday.

In what would be the biggest foreign involvement for decades, Baghdad is close to signing technical support contracts with BP (BP.L: Quote, Profile, Research), Royal Dutch Shell (RDSa.L: Quote, Profile, Research), Exxon Mobil (XOM.N: Quote, Profile, Research), Chevron (CVX.N: Quote, Profile, Research) and Total (TOTF.PA: Quote, Profile, Research).

Thamir Ghadhban, energy adviser to Iraq's prime minister, said he expected the contracts, which would add 500,000 barrels per day (bpd) to current production of 2.27 million bpd, would be signed by early next month.

"There is a rough estimate that it could cost about $400 to $500 million per field," he said in an interview.

"So a total could be up to between $2 (billion) and $2.5 billion over two years that should be paid by the government to companies."

With oil prices at around $100 a barrel, the contracts could mean extra revenues to Iraq of around $1.5 billion a month before costs, according to Reuters calculations.

Ghadhban said Iraqi representatives met with company officials last week in Amman, Jordan, to discuss final details of the initially two-year contracts, including whether payment would be by cash or by oil.