Iraq in third overseas oil deal

Iraq has the world's third-largest oil reserves

Iraq has struck a deal with a consortium led by US oil giant Exxon Mobil, and including Royal Dutch Shell, to develop the West Qurna 1 oil field.

This is the second major deal the country's oil ministry has agreed with overseas oil firms this week.

The latest deal, which needs cabinet approval, is designed to boost oil production at the Qurna oil field from 280,000 to 2.1 million barrels a day.

Earlier this week, Iraq struck a similar deal with Italian firm ENI.

Under the terms of the deal, ENI will lead a consortium to develop the Zubair oilfield in southern Iraq.

The deal, which also needs cabinet approval, calls for the group to extract 200,000 barrels of oil a day, rising to 1.1 million a day within seven years.

Raising production

Last month, Iraq signed off a deal with Britain's BP and China's CNPC.

The two oil companies will develop the giant southern oilfield in Rumaila.

The project aims to almost triple output at the 17-billion-barrel field - increasing it by two million barrels a day.

These agreements are the first major oil deals Iraq has signed with international oil companies since the US-led invasion of 2003.

Iraq has the world's third-largest oil reserves, but production has yet to reach full potential.

The country's total daily output of about 2.4 million barrels is lower than it could be, because of sanctions against former Iraqi governments, lack of investment and insurgent attacks, analysts say.