Nicosia, Sept 4 : China National Petroleum Corporation (CNPC), Asia’s biggest oil and gas company, has signed a three billion dollar agreement to develop and operate Iraq''s al Ahdab oil field under a 20-year service contract.

The agreement is the first major oil deal reached between Iraq, which has about one third of the world’s largest reserves, and a foreign firm.

Iraq’s Oil Minister Hussain al-Shahristani has said that time was running out for big western firms to conclude the deals they have been negotiating for many years.

The Minister said that the two sides had renegotiated the terms of an old deal which was signed back in 1997 concerning the development of the Adhab oil field.

The contract has been changed from an oil production sharing agreement into a set-fee service deal.

Production from the oilfield will be raised to 110,000 barrels a day (b/d) from 90,000 b/d as provided in the initial contract.

Currently, Iraq is believed to be pumping 2.4 million b/d and plans to increase output by 500,000 b/d before the end of next year. (ANI)