BP and China National Petroleum Corporation (CNPC) have signed a contract with Iraq's state-owned South Oil Company (SOC) to expand production from the Rumaila oilfield, near Basra in southern Iraq.
The signing follows BP's bid for the contract with CNPC in June.
The consortium, led by BP with partners CNPC and Iraq government representative State Oil Marketing Organisation (SOMO), has agreed to nearly triple the Rumaila field's output to almost three million barrels of oil a day (b/d), making it the world's second largest producing oilfield.
BP and CNPC plan to invest approximately $15bn (£9.2bn) in cash over the 20-year lifetime of the contract, with the intention of increasing production to 2.85 million b/d in the second half of the next decade.
Costs will start to be recovered, and fees of $2 a barrel earned on the incremental oil production once production has been raised by 10 per cent from its current level of about one million b/d.
‘The investment in Rumaila will support Iraq in achieving its ambition of becoming a major player in global oil markets once again,’ said BP's chief executive Tony Hayward.