Iraq is expected to earn around $63 billion from a contract it signed with a Chinese company to develop Al Ahdab oil field in central Iraq, Oil Minister Hussein al-Shahristani told reporters in Baghdad.

The Iraqi cabinet Tuesday approved the $3 billion oil service contract with China National Petroleum Corp. to develop Al Ahdab oil field in the central Shiite province. Shahristani initially signed the deal in Beijing last week.

It isn’t known yet, however, if the contract needs the approval of the country’s parliament or not. Some Iraqi officials and lawmakers said that the parliament should approve such a big contract.

The minister said that a Chinese delegation would be in Baghdad this month to sign the final contract.

The signing makes China National Petroleum Corp. the first foreign oil firm to enter an agreement with the central Iraqi government to invest in the domestic oil industry since the 2003 U.S.-led invasion.

CNPC originally had an agreement with the ousted regime of Saddam Hussein to develop the Al Ahdab field, giving it a 23-year stake in profits.

However, CNPC couldn’t implement the original contract at the time due to U.N. sanctions imposed on Saddam’s Iraq between 1990 and 2003, which barred direct dealings with the country’s oil industry.

Iraq has changed the terms, amending the contract from a production-sharing agreement to a set-free service deal.

(Rigzone)