January 17, 2010 / 11:39 AM / 10 years ago

UPDATE 1-Iraq to sign final deal with Eni group for Zubair

*Set to sign contract on Jan. 22

*Eni and partners target output of 1.2 mln barrels per day

(Adds background)

BAGHDAD, Jan 17 (Reuters) - Iraq’s Oil Ministry and a group led by Italian oil major Eni (ENI.MI) will sign a final deal for the development of the Zubair oilfield on Jan. 22, Iraqi Oil Minister Hussain al-Shahristani said on Sunday.

Eni and its partners won the right to develop the 4 billion barrel oilfield last year following the country’s first auction of oilfield contracts since the 2003 U.S. invasion. The field was not initially awarded in the auction in June, but a deal was reached in subsequent negotiations.

It is one of a series of agreements that could catapult Iraq to third place from 11th among global oil producers, with output capacity of 12 million barrels per day, and give it the billions it needs to rebuild after years of war and economic decline.

“Iraq will sign the final contract with Eni to develop the Zubair oilfield next Friday,” Shahristani told reporters after talks in Baghdad between company executives and officials.

Eni and partners Occidental Petroleum Corp (OXY.N) and South Korea’s KOGAS 03460.KS are targeting output for the field of 1.2 million barrels per day after adding additional reserves.

The consortium will be paid a remuneration fee of $2 a barrel on the contract. (Reporting by Ahmed Rasheed; Writing by Michael Christie; Editing by Erica Billingham)

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