A group led by Russian energy firm Lukoil signed an initial agreement on Tuesday to develop Iraq's supergiant West Qurna Phase Two oilfield.

The oilfield in southern Iraq has estimated reserves of 12.9 billion barrels of oil. Lukoil owns 85 per cent of the venture, Statoil holds the rest.

The deal was awarded after an auction of oilfield development contracts earlier this month attended by leading global energy firms.-Reuters