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In order to revitalize its economy and oil industry, Iraq has gradually opened up its oil and gas market to the outside world in the past decade through public bidding. Service contracts were mainly adopted in 2008. Though some contractors really made a profit, some blocks were not so attractive. For the purpose of improving the distribution of profits and risks between the federal government of Iraq and overseas contractors, the government has been constantly adjusting the fiscal terms of service contracts, and even introduced a new contract model — development and production contract in 2018. To provide an insight into the changes and its consequence, the process and the trend of change in the contracts over the past decade are summarized, and furthermore, a quantitative analysis is conducted with a financial model. Especially, given the importance of oil prices, a sensitivity analysis is introduced to examine how oil prices impact the income of overseas contractors under different contract models. The results indicate that the federal government was being in the process of gradually sharing equally with contractors the profits and risks arising from price fluctuation, and the new contract model, especially with the recovery of oil prices, is creating better opportunities for overseas oil companies. • The model of petroleum contracts in Iraq has been gradually changed. • Owing to the changes, the financial terms have been becoming more attractive. • The new contract model would provide better opportunities as oil prices recover. [ABSTRACT FROM AUTHOR]