China's CNPC signs $3-billion deal to develop Iraqi oil field

04 September 2008

Mumbai: China National Petroleum Corporation (CNPC) has signed a $3 billion deal with Iraqi authorities under which the Chinese oil and gas major will develop and operate Iraq's al Ahdab oil field for 20 years.

The agreement, the first major post-war oil deal to be signed by Iraq, is a revised version of an earlier contract signed in 1997, concerning the development of the Adhab oil field.

The terms of the contract, however, have been renegotiated from an oil production sharing agreement into a set-fee service deal, Iraq's oil minister Hussain al-Shahristani said.

Iraq plans to raise production from the oilfield to 110,000 barrels a day (bpd) from 90,000 bpd in the initial contract.

Iraq, which has about one third of the world's largest reserves, is reportedly pumping 2.4 million bpd and plans to increase output by 500,000 bpd before the end of next year.

''The council of ministers has agreed to sign a contract with a Chinese company to develop the Al-Ahdab oil field in Wasit Governorate," Aal-Shahrastan said over the government-sponsored Baghdad Al-Iraqiyah Television.