China Makes $3B Deal to Develop Iraqi Oil

China and Iraq have dusted off an oil deal that was in the works before the 2003 US invasion of Iraq, giving China the rights to develop the Ahdab field, reports the AP. The agreement—which has grown from an estimated $1.2 billion to $3 billion—was originally struck by the Saddam Hussein government in 1997, to take effect once UN sanctions on Iraq's oil industry were lifted.

The old contract gave a subsidiary of China's state-owned oil company concessions to develop the field on a production-sharing basis for 22 years. The new agreement, which has to be approved by the two governments, will be a service contract, under which China won't be a partner in profits and instead will be paid for its work. (More China National Petroleum Corp. stories.)