Iraq, China to sign revived $1.7b oil deal

BAGHDAD - Iraq and China are set to revive a US$1.2 billion ($1.7 billion) oil deal that was cancelled after the 2003 United States-led invasion, Iraq's Oil Ministry said yesterday.

An initial agreement with China is expected to be signed this month to develop the billion-barrel Ahdab oil field south of Baghdad.

"Iraq and China are keen to show their co-operation by finalising an agreement on developing the Ahdab oil field," the ministry said.

The announcement came after a meeting between Iraqi Oil Minister Hussain al-Shahristani and China's Ambassador to Baghdad.

If the deal is signed it will be the first Saddam Hussein-era oil deal to be honoured by the new Iraqi regime.

In 1997, Saddam's Government signed an agreement with the state-owned China National Petroleum, despite United Nations sanctions that barred direct dealings with Iraq's oil industry.

The two countries restarted talks in October 2006.

The field could produce an estimated 115,000 barrels a day.

(AP)