Eni leads a consortium with Occidental Petroleum Corp. and Korea Gas Corp. to collaborate with Iraq's state-owned South Oil Co. and Missan Oil Co. at Zubair.
The consortium said it plans to increase production at the southern oil field by more than 1 million barrels to 1.2 million barrels of oil per day within the next six years.
"We are pleased to join with the Iraqi government, the Iraqi people and our consortium partners in developing one of the world's great oilfields," said Occidental Chief Executive Officer Ray Irani.
The consortium earns $2 per barrel once production at Zubair increases 10 percent from its current rate of 200,000 barrels per day.
Redevelopment of Zubair will come through a $20 billion investment throughout the life of the 20-year contract.
Iraq held two rounds of oil auctions in 2009 in an effort to attract foreign investors to the postwar energy sector. Iraq aims to rival Saudi Arabia in terms of oil production with contracts handed out during December auctions.
Zubair holds an estimated 4 billion barrels of oil and ranks among the largest discovered fields in the world.
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