Amman: China National Petroleum Corp, known as CNPC, yesterday started crude oil production from the Al Ahdab oil field in central Iraq, Iraqi oil officials said.

The officials said output is running at a rate of 40,000 barrels per day, and will rise to 60,000 barrels a day within the next few days. By the end of the year, the field, which has reserves of 1 billion barrels, should be producing 120,000 barrels, rising to 160,000 barrels a day by the end of 2012, the officials said.

Oil will be sent to a gathering station in Tuba in southern Iraq before being pumped to export terminals. "Crude oil for export from [Al] Ahdab is expected to reach Tuba on August 10," an official said.

In March 2009, CNPC secured the first major oil-development deal with Iraq since the fall of Saddam Hussain in 2003 with its $3 billion (Dh11 billion) project to develop the Al Ahdab field, which lies in Wasit governorate, some 160 kilometres south of Baghdad.

Under the agreement, CNPC will charge a service fee of $6 for each produced barrel of oil as well as the costs incurred to develop the field.

China is a leading player in Iraq's oil sector. In 2009, CNPC sealed a deal along with Britain's BP PLC (BP) to ramp up production at Iraq's biggest oil field, Rumaila, which has estimated reserves of 17.7 billion barrels.

In December of that year, a consortium led by CNPC won the right to develop Halfaya oil field in southern Iraq, whose reserves are estimated at 4.09 billion barrels. Also, Chinese companies had secured a deal to upgrade Missan oil fields in southern Iraq.