Iraq's Ministry of Oil announced Wednesday the signing of a final agreement with Chinese company Genghua to develop an oilfield east of capital Baghdad.
Speaking at the signing ceremony, Oil Minister Jabbar Ali al-Luaibi said the contract, which was recently approved by the Iraqi Cabinet, was of economic importance to Baghdad, being the first oil project in the capital.
Moreover, the development of the field would increase the production rates in the Central Oil Company, the minister said, adding the contract had further importance in terms of providing social services as the Chinese company would construct a residential complex in the area with 2,000 housing units.
Chinese Ambassador to Baghdad Chen Wicheng, also present at the ceremony, thanked the minister and the ministry for providing 'continuous support and facilities' for Chinese companies operating in the Iraqi oil sector, stressing the desire of Chinese companies to promote joint cooperation.
A representative of Genghua, whose name was not revealed in the statement, said the company would start the development process immediately.
'The signing of the contract on Wednesday comes as a new achievement for the ministry, which will increase the national production rates in Baghdad,' according to the statement.
Ministry Spokesman Assim Jihad on Tuesday said the goal was to produce 40 thousand barrels per day over the next five years.
Jihad said crude oil produced in the field would secure fuel for power plants and other industrial facilities.
By Hale Turkes
Anadolu Agency
energy@aa.com.tr