CNPC, parent of PetroChina (PTR.NYSE;0857.HK; 601857.SH), has renewed a contract with Iraqi government to develop the Adhab oilfield, about 60 kilometers away to the south of Baghdad.

    The 3-billion-US dollar deal was sealed 10 years ago, but was suspended since the invasion of the U.S. army into Iraq in 2003. The Iraqi government and CNPC recently renegotiated the deal and changed the contract to a set-fee service deal from the oil production sharing agreement signed under Saddam Hussein regime.

    Under the new deal, CNPC and Iraqi Northern Oil Company will establish a JV on a basis of 75:25 equities, and Adhab Oilfield will produce 110,000 bpd, up from the previous target of 90,000 bpd.

    Many experts believe that the deal marks the break throughfor CNPC in the partnership with Iraq, which boasts the world's third-largest proven reserves.

    The Adhab oilfield is in Wasit province, south of Baghdadand bordering Iran.