Japan Petroleum Exploration Company (Japex) entered negotiations with Iraqi authorities to develop a giant oilfield in the Middle Eastern country, the Nikkei business daily said on Thursday.

The company has its sights set on the East Baghdad field, located outside Iraq's capital, the newspaper said without citing sources.

Japex has proposed developing the southern portion of the field, with initial output forecast at 400,000 barrels a day, enough to satisfy about 10 percent of Japanese demand, the newspaper said.

It also said that rival companies are expected to submit bids as well.

A Japex spokesman declined to comment on the report.

The Iraqi government invited foreign firms to join an auction last month for contracts to develop eight oil and gas fields.

Japex, whose joint bid with Chinese majors and others had failed earlier, will aim to secure big contracts through one-to-one negotiations with Iraqi authorities, the Nikkei said.

The newspaper also said Nippon Oil Corp, Inpex Corp and JGC Corp are jointly vying with Italy's Eni SpA for a contract to develop the Nassiriyah oil field in southern Iraq. – Reuters