Iraq, China agree $3bn oil service deal

Iraq and China have agreed the terms of a $3 billion oil service contract, Iraq's oil minister said on Wednesday, announcing the first major oil contract with a foreign firm since the fall of Saddam Hussein.

The contract is for the Adhab oilfield and replaces a contract signed with China before the 2003 US-led invasion of Iraq.

The revised deal has raised the target oil output for the field to 110,000 barrels per day (bpd), up from the previous 90,000 bpd, Hussain Al-Shahristani told Reuters in an interview.

Production should start in three years and continue for 20 years, he said.

The implementation of delayed short-term technical service contracts with oil majors was looking "more and more unlikely", Shahristani said.

Despite that, Iraq still hoped to boost oil output by 500,000 bpd by the middle of next year, he added. (Reuters)