China and Iraq have signed a $3 billion deal revising a prewar agreement for China's biggest oil company to help develop the Ahdab oil field, an official at the Iraq's Oil Ministry said Thursday.
The deal, restoring a project canceled after the 2003 U.S.-led invasion of Iraq, was signed late Wednesday by Chinese officials and Iraqi Oil Minister Hussain al-Shahristani.
"The initial agreement has been signed, and we are waiting to see the approval of both governments," said Sarhad Fatah, a spokesman at the Iraqi Embassy in Beijing.
Major oil companies have been reluctant to commit to deals in Iraq because Baghdad has yet to enact a law to govern the oil industry.
If it is approved, the agreement would be the first Saddam-era oil deal to be honored by the new Iraqi government.
Iraq sits on more than 115 billion barrels of oil, but decades of wars, U.N. sanctions, violence and sabotage have battered its oil industry.
The Ahdab field is located in Shiite-dominated Wasit province, about 100 miles (160 kilometers) southeast of Baghdad. It has been the scene of sporadic attacks since the U.S.-led invasion in 2003.
As security improves, Iraq is trying to bring in foreign companies to help increase crude output from the current 2.5 million barrels a day to 3 million barrels a day by the end of 2008, and 4.5 million barrels a day by the end of 2013.
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