BAGHDAD — The Iraqi cabinet approved a key deal with Britain's BP and China's CNPC International to almost triple production at a giant southern oilfield, an oil ministry spokesman said on Sunday.
"The council of ministers approved the agreement on Friday and it will be signed soon in an official ceremony," Assem Jihad told AFP.
The venture, expected to cost between 14 and 20 billion dollars, is expected to boost production at the southern Rumaila field from the current one million barrels per day (bpd) to around 2.8 million bpd over its 20-year duration.
Rumaila is already integral to Iraq's oil output, contributing almost half of the nation's current production of around 2.5 million bpd.
BP and CNPC were the only companies with a successful bid when Iraq offered eight contracts at a June auction. The companies agreed to receive only two dollars a barrel to operate Rumaila, which has known reserves of 17.7 billion barrels.
It is the first big upstream deal between Iraq and foreign oil majors since nationalisation of the country's oil industry about four decades ago.
Under the terms of the contract, Iraq's State Oil Marketing Organisation will be allocated Baghdad's 25 percent stake, while BP will take 38 percent and CNPC the remaining 37 percent.
The second round of bidding for Iraqi oil contracts is due in the first half of December, Oil Minister Hussein al-Shahristani has said.
