China National Petroleum Corp, the country's largest oil producer, has signed a $US3 billion deal to develop an oil field in Iraq.
The contract, signed on Monday in Baghdad, allows China National Petroleum Corp and another Chinese company, Zhenhua Oil, to develop the Al-Ahdab oil field in the province of Wasit for 23 years.
Oil production is expected to reach 25,000 barrels a day in the first three years and expand to 115,000 barrels a day in six years, it says.
While output from the field will be exported, a portion of it will be used to fuel power generation stations nearby to alleviate electricity shortages in Iraq.
The project, the first big oil development deal that a foreign firm has secured in Iraq since the fall of Saddam Hussein in 2003, revives a contract signed in 1997 that granted China exploration rights to the Al-Ahdab oil field.
The Al-Ahdab oil contract is not expected to generate any revenues for China except service fees, but offers an entry into Iraq's oil reserves ahead of Western competitors.
