Reuters reported that Iraq's oil ministry as saying that it signed a final deal on November 3rd 2009 with BP and China's CNPC to develop its biggest oilfield, Rumaila the nation's first major oil pact since the US invasion in 2003.

Mr Asim Jihad spokesman of oil ministry said that the ministry also signed an initial deal on November 1st 2009 with Italy's Eni Spa over the Zubair oilfield.

Mr Jihad said that the agreement with Eni and its partners, Occidental Petroleum Corporation and South Korea's KOGAS must be approved by Iraq's cabinet before a final contract can be signed. Both deals involve super giant oilfields and a promise of increased production that could catapult Iraq up to the top ranks of the league of oil producing nations.

Iraq's oil infrastructure is dilapidated after years of war, sanctions and underinvestment and while it has the world's third largest reserves, it is only the 11th largest producer. The country hopes foreign investment will help it move up to third place with oil output of around 7 million barrels per day triple current production of around 2.5 million barrels per day within 6 or 7 years.

Rumaila with estimated reserves of 17 billion barrels is the workhorse of Iraq's oil sector producing almost half of the country's total daily output.

The deal with BP and CNPC was the only one that emerged from Iraq's first post invasion auction of oil contracts in June after international firms balked at Iraq's stiff terms.

Subsequent negotiations behind closed doors have however, led to other deals being worked out on some of the fields that were not successfully auctioned off. One of those is the agreement with Eni and its partners over Zubair.

Eni said that it expects to invest USD 10 billion in Zubair which has estimated reserves of 4 billion barrels and will boost production to 1.125 million barrels per day from 200,000 barrels per day within 7 years.

(Sourced from Reuters)