Iraq on Friday signed a contract with a consortium led by Italy's Eni to develop the giant al-Zubair oil field in the southern province of Basra. Iraq's oil Ministry and Eni led consortium were negotiating the deal to develop the 4-billion-barrel oil field since last year. Besides Zubair deal, Iraq, first time since 2003, will also strike seven new contracts for other oil finds.

Other members of the consortium include Westwood-based Occidental Petroleum Corp and Korea Gas Corp which would jointly develop oil field in Iraq by investing around $20 billion under a 20 year contract. Eni holds 32.8% share in the Zubair consortium followed by 23.44 per cent by Occidental and 18.75% by Kogas of South Korea.

James Di Georgia, publisher of the Gold and Energy Advisor investment newsletter and author of "The Global War for Oil" added, "It's a great agreement for Occidental, with the caution that no one should be betting on smooth sailing in Iraq. There will be quite a few bumps in the road."

Occidental Chairman and Chief Executive, Ray R. Irani hoped that the company would repeat the success stories it had achieved in Middle-East by successfully concluding the various oil projects.

Shares of Occidental surged 9 cents to close at $76.10.