* Second-round bonuses will be non-recoverable
* Iraq expects more deals in second bidding round than first
* Iraq mulls re-offering fields skipped in first bid round
(Adds month of second round, quote, analyst, details)
By Ahmed Rasheed and Ayla Jean Yackley
ISTANBUL, Aug 25 (Reuters) - Iraq on Tuesday said it expects greater success in a second oil auction this year, and has lowered signature bonuses to sweeten deals for foreign firms even though investors may be deterred by non-recoverable fees.
Iraq's first major energy auction since the 2003 invasion, held with much fanfare in Baghdad in June, disappointed global oil companies after it emerged Iraq wanted to pay them far less than they had expected to get for developing Iraq's rich fields.
Avoiding a repeat of such a result in a second bidding round set for December will depend largely on improving those terms and, so far, analysts are sceptical.
Oil Minister Hussain al-Shahristani said "lessons were learned" from the lack of bids in the first round, giving reporters in Istanbul after a meeting with global oil companies some clues as to what Iraq will do differently this time.
"The mismatch of the first bid round, we think a number of issues have been better understood by both sides. We expect a better matching between our expectations with what the companies are going to bid in the second round," he said.
"These contracts are much simpler and the (oil firms) are much happier with these contracts in terms of determining what their fees are, their plateau of production," he added.
One key shift will be in Iraq's demands for signature bonuses, which even at $1.2 billion for the 10 oilfields on offer was far less than what Iraq envisioned in the first round.
"Some oil companies told us that the level of the signature bonus in the first bidding round has affected their fees in a very significant way," Shahristani said.
SAME OUTCOME?
Bids are judged mainly on the fees each firm asks for its work, expressed in per barrel terms for the oil produced.
But the signature bonuses in the second round will be non-recoverable, unlike the recoverable bonuses akin to soft loans of the first round. That could scare off some oil firms.
Most companies, including firms from resource-hungry China and India eager to get a share of the world's third-largest oil reserves, balked at Iraq's stiff contract terms in the first round. Only one deal, for Rumaila, Iraq's biggest oilfield, was awarded to a consortium led by BP.
Analysts are pessimistic about the level of interest Iraq can garner if it offers the same terms as in the first round.
"Companies were unwilling to go for the biggest fields on offer anywhere in the world in the first round. Would they really go for smaller fields, some of them in riskier parts of Iraq, on the same terms?" Samuel Ciszuk, Middle East energy analyst at IHS Global Insight, said. "It doesn't look good."
The signature bonuses for the East Baghdad, Halfaya, Majnoon and West Qurna super giant fields offered up in the second round will be $150 million each, said Abdul-Mahdy al-Ameedi, deputy director of Iraq's contracts and licensing directorate.
Iraq will seek signature bonuses of $100 million for each of the other fields it plans to offer, Ameedi told oil companies in Istanbul. That compares with Rumaila's bonus of $500 million.
Shahristani said deals will give Iraq a 25 percent stake.
REVISITING THE FIRST ROUND
Ameedi told Reuters Iraq would invite firms that submitted bids in the first round to compete again for the same fields once revised terms are announced, expected later this year.
"With respect to oilfields that were not awarded, the ministry is currently considering its options. Whatever options are chosen, and it will be shortly announced, will be based on competitive rather than bilateral principles," said Shahristani.
The fields on offer in the second round have estimated combined reserves of 41.3 billion barrels. (Reporting by Ahmed Rasheed and Ayla Jean Yackley, additional reporting by Tom Bergin in London; writing by Mohammed Abbas; Editing by Peter Blackburn)