BAGHDAD — An Exxon Mobil-led consortium has beaten rival groups including LUKoil to bag initial rights to develop Iraq’s West Qurna field, the oil ministry said, adding momentum to Iraq’s bid to unlock its oil riches.

With reserves of 8.7 billion barrels, West Qurna is among the prized Iraqi fields eyed by Western oil majors as they face flat or lower output at home and stiff competition from Chinese and Indian oil companies in bidding for oilfields elsewhere.

“The consortium led by Exxon Mobil, which includes Shell, won the contract to develop the West Qurna Phase One oilfield,” Oil Ministry spokesman Asim Jihad said.

The initial deal was signed in Baghdad on Thursday but needs to be approved by the cabinet before it can be finalized.

Exxon, partnering with Royal Dutch Shell, beat LUKoil — which had teamed up with No. 3 U.S. oil major ConocoPhillips — and two other groups led by France’s Total and China’s CNPC.

“It will be a big loss for LUKoil,” which did work on West Qurna when Saddam Hussein ruled Iraq, said Samuel Ciszuk, an analyst at IHS Global Insight. “They have really been eyeing this field.”

The companies will be paid a fee of $1.90 a barrel for the oil that they produce, said Asim Jihad, an Oil Ministry spokesman. It is the maximum amount set by the government in a June licensing round.

(Reuters, Bloomberg)