Iraq signed a final contract on Friday 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, US-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." 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 US 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.

Copyright Reuters, 2010