State-owned China National Petroleum Corporation (CNPC) said the first phase of Iraq's Halfaya oilfield had started operating and had a production capacity of 100,000 barrels per day.

CNPC, which is the first foreign oil company to sign an oil service contract in Iraq after former president Saddam Hussein was toppled, said the Halfaya project had come on stream 15 months ahead of schedule.

CNPC has started preliminary work on the second phase of Halfaya, which will bring the capacity to 200,000 bpd, it said on its website on Monday.

Iraq signed a contract in 2010 to develop Halfaya with CNPC, France's Total and Malaysian state company Petronas, for a fee of $1.40 per barrel. CNPC has a 37.5 per cent interest in the consortium.

Halfaya is CNPC's largest overseas project as an operator.

Last year, CNPC completed construction of the first phase of Al-Ahdab oilfield in Iraq, with a capacity of 60,000 bpd.

CNPC, the parent of PetroChina, also received its first cargo of crude oil as payment for helping to develop Iraq's Rumaila oilfield last year.

China's crude oil imports from Iraq rose 17 per cent on year to 5.95 million tonnes, or 359,000 bpd, in the first four months of this year. – Reuters