British-Chinese Consortium Signs Iraq Oil Deal

SINAN SALAHEDDIN

BAGHDAD (AP) — Iraq on Tuesday finalized a deal with a British-Chinese consortium to develop its biggest oil field, a deal marking a milestone moment in the OPEC nation's push to lure foreign investors sorely needed to revamp its battered oil sector.

The 20-year contract signed by Iraqi Oil Minister Hussain al-Shahristani and executives from British oil giant BP PLC and China's CNPC gives the two companies development rights to the 17.8 billion barrel Rumaila field in Iraq, home to the world's third largest proven oil reserves.

The deal marks a key step forward for Iraq, which has been struggling to attract foreign firms whose cash and expertise is badly needed to rebuild an oil sector where the effect of years of sanctions and neglect have only been amplified by sabotage and violence following the 2003 U.S.-led invasion to topple Saddam Hussein.

Al-Shahristani said contracts, such as the one signed Tuesday and others pending, are a significant step forward for a country that had previously used its oil wealth as a way to boost its military.

"With these contracts Iraq has begun a new period of construction," he said. "With this great step, we will attract big companies and investors in Iraq."