New York: Iraq is negotiating with Exxon Mobil Corp and Petrochina Co to develop two oilfields in the south of the country as it seeks to maintain overall production at about 4.8 million barrels a day for the rest of 2016, Deputy Oil Minister Fayyad Al Nima said.

The companies have submitted offers to develop the Artawi and Nahran Omar fields, which Iraq’s Oil Ministry hopes will produce a combined 550,000 barrels a day, Al Nima said Wednesday in an interview in Baghdad. The fields together are pumping about 70,000 barrels daily, and the ministry wants to start the project in six months, he said. Al Nima assumed the duties of oil minister after Adel Abdul Mahdi suspended his participation in the cabinet in March.

Iraq, Opec’s second-biggest member, is producing 4.78 million barrels a day, with 4 million barrels coming from fields in the south, Al Nima said. The self-governing Kurdish region in northern Iraq contributed the remainder, pumping more than 700,000 barrels a day independently of the central government, he said. Exports from the south are averaging 3.19 million barrels a day, and the ministry sees shipments reaching 3.2 million by month-end and staying at about that same level until the end of the year, he said.

Battling insurgents

Iraq is trying to expand oil production amid lower prices and a military campaign against Islamic State insurgents, who control large chunks of territory in the north. The country’s largest oilfields are mostly in the south and physically insulated from the fighting. Iraq pumped 4.3 million barrels a day of crude in June, an increase of 32 per cent from its average annual output in 2014, data compiled by Bloomberg show.

Iraqi Kurds are exporting 520,000 barrels a day via Turkey’s Mediterranean port of Ceyhan, Al-Nima said. They use their own pipeline, as the Baghdad-operated link to Turkey from the northern oil hub of Kirkuk has been shut down due to the conflict with Islamic State.

Iraq, which holds the world’s fifth-biggest crude oil reserves, is in separate talks with Petrochina and Korea Gas Corp to reach a final agreement to build a refinery with a capacity of 300,000 barrels a day and to develop an oilfield in Nasiriya in southern Iraq, Al Nima said.