Zhenhua Oil will develop the southern part of the East Baghdad oilfield, Reuters reports.
The Chinese oil company has agreed to develop the oilfield over five years with the aim of increasing output to 40,000 barrels per day (b/d), the news agency reports.
The field has an estimated eight billion barrels of oil reserves, according to Reuters.
Development costs could hit $3 billion, the Head of Iraq’s Oil Ministry’s Licensing and Contracts Office, Abdul Mahdi El Ameedi, said, according to Alsharq Al-Awsat.
The contract with Zhenhua differs from previous contracts.
“The East Baghdad contract was drafted in a way to significantly minimize the cost of oilfield developments. This contract will be a model for the following oil deals,” El Ameedi said.