The semiautonomous Kurdistan Regional Government said it supported a development plan for the Shaikan oil field as proposed by Gulf Keystone Petroleum Ltd.
Gulf Keystone, a company with headquarters in London, said last week it started drilling its first exploration well in the Shaikan oil field. It said the entire field could hold as much as 10.5 billion barrels of oil.
The KRG said the first phase of production under the plan, which starts in a few weeks, will yield 40,000 bpd. That level will increase gradually and reach 250,000 bpd by 2018.
"Production from the Shaikan block will play a crucial role in helping the Kurdistan region to achieve its overall oil export targets of 1 million barrels per day by the end of 2015, and 2 million barrels per day by the end of the decade," the government said in a statement Wednesday.
The central and Kurdish governments in Iraq are at odds over legal issues related to oil. The central government says some of the unilateral action taken by its counterparts may be illegal.