Petrel Resources, the AIM-listed company, has moved a step closer to securing a foothold in Iraq.

The company announced yesterday that the Iraqi oil ministry had invited it to enter "an urgent and direct discussion to finalise all technical and commercial matters" in relation to a tender Petrel submitted to develop an Iraqi oilfield.

Following the announcement issued by Petrel's managing director, Mr David Horgan, its shares rose yesterday by 16p to 66p in London yesterday, with close to four million shares traded.

The talks involve the first of three tenders Petrel submitted between April and June of this year. Petrel, chaired by Mr John Teeling, says it has offered full project financing, if successful, via an international partner. The three fields for which it has tendered are the Khurmala Dome, Hamrin and Subba & Luhais fields and the latest negotiations relate to the first of these.

Industry sources said that, while the announcement clearly indicated that Petrel's tenders were being taken seriously, it was difficult to read too much into invitation for detailed talks.

However, the announcement still spurred the shares forward yesterday, continuing a trend which has seen them rise from 25p in January.