Iraq signed Tuesday a major oil deal with Britain's BP and China's National Petroleum Company ( CNPC) to develop its Rumaila oilfield in southern Iraq.

Iraqi Oil Minister Hussein Al-Shahristani signed the deal worth 50 billion U.S. dollars with representatives and heads of the British and Chinese companies in a ceremony held in Baghdad al- Rasheed Hotel at the edge of the heavily fortified Green Zone.

On June 30, Iraq offered eight of its oil and gas fields to foreign companies in its first-ever oil and gas field auction for decades, but only one deal was concluded with Britain's BP and China's CNPC to develop super-giant Rumaila field, after other oil firms were reluctant to agree on the Iraqi oil ministry's stiff terms.

Under the service contract, BP and CNPC would not share the oil production, but only be paid fees on extra barrels produced. Additionally, Iraq's State Oil Marketing Organization (SOMO) would be responsible for the marketing job.

In the Rumaila field joint venture, BP takes 38 percent shares, CNPC 37 percent and Iraq's State Oil Marketing Organization (SOMO) 25 percent. The consortium is expected to increase the current production of about 1 million barrel per day (bpd) to 2.8 million bpd within the coming six years.

Shahristani said in a speech that such contract opened "a new age" for Iraq oil production, emphasizing that his ministry had been working to attract big international companies to come to Iraq and boost its oil production.

"We are pleased to have the opportunity to help Iraq rebuild its economy after years of war and sanctions. The investment in Rumaila will support Iraq in achieving its ambition of becoming a major player in global oil markets once again and will catalyze training and development opportunities for the many thousands of Iraqi workers on Rumaila," said BP's chief executive Tony Hayward.

"CNPC is a responsible company. BP has resourceful experience. The South Oil Company has a good local environment. We three had reached a consensus, to try to materialize related contract terms earlier than the stipulated date," said Jiang Jiemin, president of CNPC.

Jiang also emphasized that "in the whole process of the Rumaila oil field project, we will pay more attention to the environment protection, for the benefits of local people."

Affirming CNPC's performance on the al-Ahdab oil field project in Iraq's Wasit province, Jiang revealed that daily production there would reach 40,000 barrels in 2011, and the company would " set a good example for the reconstruction of Iraq" by trying to achieve its production goal earlier than the stipulated date.

Assem Jihad, spokesman for Iraq's Oil Ministry told Xinhua that Iraq would make use of global experience and high technologies. " BP and CNPC are well known for their global field operations. We need more experience to develop oil industry which has been ignored for ages," he added.

Rumaila, with estimated reserves of 17 billion barrels, is the workhorse of Iraq's oil sector, producing almost half of the country's total daily output of around 2.5 million bpd.

The two companies have agreed to accept payment of 2 dollars for every extra barrel of oil extracted on top of current production of oil at the Rumaila oilfield. Enditem