OREANDA-NEWS. July 20, 2011. China and Iraq have pledged to boost trade ties and step up cooperation in oil exploration, power generation and other fields, China state media has reported.

The countries signed two agreements on economic cooperation and training during a visit to Beijing by Iraqi Prime Minister Nurial-Maliki, the first Iraqi PM to visit China in over 50 years of diplomatic relations, official Xinhua news agency reported late Monday.

 "The Chinese government will encourage companies to establish a long-term and stable relationship on oil and natural gas supply and demand with the Iraqi side and expand cooperation in oil exploration, refinery and equipment trade," China's Prime Minister Wen Jiabao told local media after talks with his Iraqi counterpart.

 Maliki said he hopes more Chinese companies will invest in Iraq and called for the two sides to expand cooperation in oil and gas, electricity, transportation, housing, telecommunications and agriculture.

 He also vowed to take further measures to protect the safety of Chinese nationals in Iraq and the interests of Chinese companies there. State-owned China National Petroleum Corp. or CNPC commenced operations at the Ahdab oil field in Iraq in June, targeting first phase output at 3 million mt/year (60,247 b/d).

 Ahdab, located 180 km (112 miles) southeast of Baghdad, was originally signed to CNPC by the late Saddam Hussein under a production sharing contract, then renegotiated as a service contract in late 2008, in line with Iraq's policy of awarding technical service contracts to foreign oil companies after Saddam's ouster in the US-led invasion of 2003. Beijing-based Zhenghua Oil has also signed a service contract to work in the Ahdab oil field for 23 years.

 Iraq will be one of CNPC's major overseas cooperation partners during China's 12th Five-Year Plan from 2011 to 2015, Overseas Investment Environment Research Department engineer Wu Mouyuan was reported as saying in the China Daily Tuesday. The department is a unit of the CNPC Research Institute of Economics and Technology.

 "We will focus on three oil fields within five years in Iraq and have set ambitious targets for their development," Wu said.

 CNPC had been negotiating oil contracts with Iraq since 1997, Wu said, but noted that issues like safety and poor infrastructure still posed challenges to companies operating in Iraq.