MercoPress. South Atlantic News Agency

Iraq signs oil development agreements with Britain, China and Italy

The country has the world’s third largest proven oil reserves

Iraq's oil ministry has signed an initial agreement with a consortium led by the Italian firm, ENI, to develop the Zubair oilfield in southern Iraq. The deal which 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.

The project could be Iraq's second major contract with overseas oil firms since the US-led invasion in 2003. 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.

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.