The amount of work necessary is still unclear

The keenly-awaited two-year contracts replace a controversial deal agreed in May, under which a subsidiary of US firm Halliburton got the work.

Halliburton was previously run by Dick Cheney, now US vice-president.

All US and eligible foreign companies - those that meet criteria in US trade legislation - will be allowed to take part this time.

Hard work

The US Army Corps of Engineers said one contract would cover fields in the north of Iraq, and the other the south, with the exact final value dependent on the amount of work necessary.

More details of the precise nature of the work will be hammered out a conference in Dallas on 14 July.

The most immediate task is extinguishing oil well fires, followed by environmental assessments and cleanups.

The contracts then envisage moving onto engineering work, designing and constructing new oil facilities, modernising and maintaining refineries and pipelines, and distributing fuel within Iraq.

Much of Iraq's oil infrastructure was struggling to function, even before the war.

More than ten years of sanctions has meant that Iraq found it virtually impossible to get its hands on vital equipment needed to pump oil efficiently.

Iraq is home to the second largest reserves of oil in the world, after Saudi Arabia, but it is likely to take many years to bring oil from untapped areas to market.