Biden says January election critical to Iraq's future

US Vice President Joe Biden said on Thursday a parliamentary election scheduled for January is "critical to Iraq's future" but acknowledged that position-taking ahead of the vote was hampering key legislation.

A long awaited new oil and gas law intended to open up the Iraqi hydrocarbons sector and establish a framework for sharing out the revenues was still some way off, he admitted.

"In truth, some of the more difficult problems are more difficult to solve in an elections cycle," he said.

The vice president raised the issue of the oil law in his talks in Baghdad and was to deliver the same message in meetings with Kurdish leaders in the north of the country, a senior US official said.

Early passage of the legislation was "in the best interest of the country," added the official, asking not to be named.

Biden also urged Iraq to offer more generous terms at its next auction for oil concessions.

Biden "made clear that the next round of bidding on oil concessions should be made on more generous terms to attract more outside interest," the official said.

"Only one of eight deals up for bidding earlier this year was taken," he said, referring to Iraq's first tender offer in four decades last June that saw investors snub all but one of the contracts on offer.

The official said that "even one other deal would mean 50 to 60 billion dollars in additional investment in Iraq, 600 million dollars in additional annual revenue, and tens of thousands of additional jobs.

"Ultimately, in our judgement, it's in the interest of every Iraqi to accept a smaller piece of a much bigger pie."

The second round of bidding for Iraq's oil contracts is due to take place in the first half of December.

In June, British energy giant BP and China's CNPC International Ltd were the only companies to win a bid. They accepted two dollars per barrel to work jointly in the giant Rumaila oil field in southern Iraq.

Biden welcomed the lack of sectarian reprisals after deadly bombings in Baghdad last month, saying it was "a mark of real maturation" of the Iraqi people and government.

He said a proposed referendum on changing the Iraq-US security agreement to bring forward the deadline for the withdrawal of US forces by a year to 2010 was still some way off.

But he added: "Whatever the Iraqi people decide we will abide by it."

On Afghanistan, he said it was still "very premature" to decide on sending additional resources given that the full contingent of troops already approved had yet to arrive.

"There is no decision imminent on additional resources," he said.