Japan Petroleum Exploration Co (Japex) and Petronas of Malaysia will jointly invest a total of about $7 billion to develop Iraq's Gharaf oilfield, the Nikkei business daily reported on Sunday.

Oil Minister Hussain Al-Shahristani said on Saturday the two firms had won a deal to develop the oil field.

The announcement was made at the end of a two-day bidding round for 10 oil contracts at which Baghdad had received pledges from oil firms to boost output by 4.765 million barrels per day, almost double Iraq's current output.

Japex has a 40 percent interest in the deal, while the remainder is held by Petronas, the Nikkei said.

The Gharaf oil field has reserves of 860 million barrels, the Nikkei said, citing data from the Iraqi oil ministry.

It will be the first time for a Japanese oil firm to take part in an oil field development project in Iraq, the Japanese daily said.   

The agreement with Iraq could be signed as early as the beginning of next year, it said. - Reuters