Iraq, China's Zhenhua to develop East Baghdad oilfield

Brent crude futures settled at $66.44 a barrel, down 0.9 percent, or 58 cents. U.S. West Texas Intermediate (WTI) crude futures settled at $59.64 a barrel, down 33 cents, or 0.6 percent. The previous day, Brent broke through $67 for the first time since June 2015 and WTI rose above $60 a barrel for the first time since May 2015.

BAGHDAD: Iraq has reached an initial deal with China's state-run Zhenhua Oil to develop the southern portion of the East Baghdad oilfield, the oil ministry spokesman said on Sunday.

Iraq is seeking the help of Zhenhua Oil to increase production from East Baghdad oilfield to 40,000 barrels per day within five years as of the start of the development operations, Asim Jihad said in a statement.

Iraqi oil officials have estimated the East Baghdad field, a "super giant" with around 8 billion barrels of crude reserves, has the potential to produce 120,000 barrels of oil per day.

Under the initial deal with Zhenhua Oil, which will be announced in formal ceremonies to be held in Baghdad on Monday, the Chinese firm will commit to building an "oil residential complex", the statement said.

Oil Ministry officials said increasing East Baghdad crude production would help feed nearby refineries and power stations and free up more oil for exports from the southern region.

Iraq produces and exports the bulk of its crude from the southern region. - Reuters