Iraq's Oil Ministry said that it will sign a final deal on Nov. 3 with BP and China's CNPC to develop its biggest oilfield, Rumaila, the nation's first major oil pact since the U.S. invasion in 2003.
The ministry will also sign an initial deal on Nov. 1 with Italy's Eni Spa over the Zubair oilfield, Oil Ministry spokesman Asim Jihad said. The agreement with Eni and its partners, Occidental Petroleum Corp and South Korea's KOGAS, must be approved by Iraq's cabinet before a final contract can be signed, Jihad said.
Both deals involve supergiant 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 under investment, 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 (bpd) -- triple current production of around 2.5 million bpd -- within six or seven 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 has said it expects to invest $10 billion in Zubair, which has estimated reserves of 4 billion barrels, and will boost production to 1.125 million bpd from 200,000 bpd within seven years.
Iraq will hold a second round of oilfield tenders on Dec. 11-12 in which largely undeveloped fields will be on offer.
