BAGHDAD (Reuters) - Iraq today signed a final contract with a group led by Italian oil major Eni to develop the 4-billion-barrel Zubair oilfield, one of a series of deals Iraq hopes will propel it to major producer status.
Eni and its partners, U.S.-based Occidental Petroleum Corp and South Korea's KOGAS, set an output target for the field of 1.2 million barrels per day.
"The consortium will invest over $20 billion," Eni chief executive Paolo Scaroni told Reuters. "We will start tomorrow morning."
"We are confident that we will be able to achieve a production in excess of 1.2 million barrels per day and this will comply with our contractual targets," he said.
The consortium plans to invest the approximately $20 billion over the 20-year life of the contract, which has a possible extension to 25 years, Eni said in a statement.
"Target production is expected to be progressively reached within the next six years and maintained for seven years thereafter," the statement said.
The group won the right to develop Zubair last year following the country's first auction of oil contracts since the 2003 U.S. invasion. The field was not initially awarded in the auction in June, but a deal was reached in subsequent negotiations.
The consortium will be paid a remuneration fee of $2 a barrel on the contract.
The Zubair deal is one of a series struck by Iraq last year that could lift it to third place from 11th among global oil producers with an output capacity of 12 million barrels per day in about six years, giving it the billions it needs to rebuild after years of war and economic decline.
KOGAS said on January 20 that it would invest $6.5 billion in developing the field. The deal is part of South Korea's drive to invest $12 billion in overseas energy and resources this year to fuel its manufacturing-based economy.