BAGHDAD , Iraq ( CNN ) -- Iraq has signed its first major oil deal with a foreign company since the fall of Saddam Hussein 's regime , a spokesman for the Iraqi Oil Ministry said Saturday . Iraq 's oil fields currently produce about 2.5 million barrels a day . It was the first time in more than 35 years that Iraq has allowed foreign oil companies to do business inside its borders . The contract with the China National Petroleum Corporation could be worth up to $ 3 billion . It would allow the CNPC to develop an oil field in southern Iraq 's Wasit province for about 20 years , Oil Ministry spokesman Assim Jihad said . Iraq 's Cabinet must still approve the contract , but Jihad said that would happen soon and work could start within a few months . The Chinese company will provide technical advisers , oil workers and equipment to develop al-Ahdab oil field , providing fuel for al-Zubaidiya power plant in Wasit , southeast of Baghdad , bordering Iran , Jihad said . Once development begins , the field is expected to start producing a preliminary amount of 25,000 barrels of oil a day and an estimated constant daily amount of 125,000 barrels after three years , he said . Iraq currently produces about 2.5 million barrels a day , 2 million of which are exported daily , Jihad said . That is close to its status before the U.S.-led war that toppled Saddam in 2003 , but below its levels prior to the Persian Gulf War in 1991 . Iraqi Oil Minister Hussein Shahrastani said in July that he is confident Iraq will be able to double its production in the next five years . As it did with other international companies , the Saddam regime had a partnership contract with CNPC signed at the end of the 1990s that entitled the company to share profits . The current contract , however , will be only a `` service contract '' under which CNPC is simply paid for its services , Jihad said . He said Iraq has provided `` security guarantees '' for CNPC , as it would for any other foreign company that will work in Iraq 's oil fields . Jihad called it a major and significant move for Iraq . Iraq sparked a scramble for lucrative oil contracts in June , when Shahrastani opened bidding to 35 international companies for long-term contracts to redevelop six oil fields . The Oil Ministry continues to negotiate short-term , no-bid contracts with several U.S. and European oil companies , including Exxon Mobil Corp. , Royal Dutch Shell , Total SA , Chevron Corp. and BP . Iraq has among the largest oil reserves in the world , with an estimated 115 billion barrels , tying Iran for the No . 2 status behind Saudi Arabia 's 264 billion barrels , according to estimates from the Energy Information Administration . CNN 's Jomana Karadsheh contributed to this report .
Iraq signs up to $ 3 billion oil deal with Chinese national oil company . Deal is first major contract with foreign company since fall of Hussein Shahrastani . China National Petroleum Corporation to develop oil field in southern Iraq . Oil field expected to produce 25,000 barrels a day within June .