A consortium of Anglo-Dutch oil giant Shell and Malaysia's Petronas signed a contract with Iraq on Sunday to operate the enormous Majnoon oil field in the war-torn country's south.
The Baghdad government had approved the agreement in early January as part of four deals with foreign energy firms to dramatically ramp up Iraq's oil output following an auction in December.
Shell and Petronas will receive 1.39 dollars per barrel of oil extracted from Majnoon, which has known reserves of 12.58 billion barrels. They expect to produce 1.8 million barrels per day.
The Anglo-Dutch company has a 60-percent stake in the project, while its Malaysian counterpart has the remaining 40 percent.
"We look forward to fruitful cooperation with the two companies," Iraqi Oil Minister Hussein al-Shahristani said, adding their operations were to begin on Monday.
The government auctioned the fields in December, massively increasing Iraq's projected crude production to 12 million bpd within seven years, from current output of around 2.5 million.
But security and dilapidated infrastructure remain key obstacles to achieving that target.
Iraq has the world's third-largest oil reserves — only behind Saudi Arabia and Iran — with an estimated 115 billion barrels.
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