Eni, Occidental Petroleum Corporation (Oxy) and Korea Gas Corporation (KOGAS) announced today that they have signed a contract with Iraq's state-owned South Oil Company (SOC) and Missan Oil Company, to redevelop the Zubair field, near Basra in southern Iraq.

The consortium, led by Eni (32.81%) with partners Oxy (23.44%), KOGAS (18.75%) and the Missan Oil Company (25%), plans to increase production from the Zubair field to 1.2 million barrels of oil a day, representing an increase of more than 1 million barrels of oil per day. Target production is expected to be progressively reached within the next six years and maintained for seven years thereafter.

The consortium will earn $2 per barrel on the incremental oil production once production has been raised by 10 percent from its current level of approximately 200,000 barrels of oil per day and will recover its expenditures through a cost recovery mechanism. The consortium plans to invest approximately $20 billion over the life of the 20 year contract, which has possible extension to 25 years.

The redevelopment of the Zubair field, one of the largest discovered fields in the world, will materially contribute to support Iraq in becoming a major player in global oil markets. It will also foster the social and economic development at a regional and national level, not only by providing training and development opportunities for the many thousands of Iraqi workers of Zubair, but also by promoting much-needed economic stimulus.

The Zubair Field Operating Division will manage the rehabilitation and expansion project, which will be staffed mainly by employees from South Oil Company and expert support from the consortium, with the intent to progressively develop a self-sustained organization.

"The signing of the Zubair contract comes as a result of Eni's commitment to becoming a long-term partner for the development of Iraq's hydrocarbon industry. Our experience in similar environments, the financial and technological strength of our consortium and the deep knowledge of our partner SOC, undoubtedly constitute the building blocks of a successful venture," said Paolo Scaroni, Chief Executive Officer of Eni.

"Oxy is a very active and cooperative partner in many successful projects across the Middle East, and we expect similar success in Iraq," said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental Petroleum. "We are pleased to join with the Iraqi government, the Iraqi people and our consortium partners in developing one of the world's great oilfields."

"KOGAS is pleased to participate in the development of the super-giant oil field in Iraq. Through the development of Zubair project, KOGAS hopes to contribute more to the reconstruction and rehabilitation of Iraq and expects to play a bridge role in enhancing bilateral economic relationship between Iraq and Korea" said Choo Kangsoo, President & CEO of Korea Gas Corporation.

Eni is the leader in the Middle East region, where it operates in exploration, drilling, and in the engineering and construction sector through Saipem.