State-owned CNPC, China's largest oil and gas firm, is progressing well with its oil exploration and development projects in Iraq and Iran, a company newspaper said.

The parent of PetroChina started drilling the first appraisal well, N111E, in the north Azadegan oilfield in Iran on March 19, ahead of schedule, the China Petroleum Daily reported.

Three oil deposits, Sarvak, Kazhdomi and Gadvan, have been found in the north Azadegan field that covers 460 sq km, the report said.

It did not specify any estimates on oil reserves.

CNPC is contracted to develop north Azadegan into a 120,000-barrel per day field at a cost of at least $2 billion.

Three-demensional seismic and drilling works will start in June at the Halfaya oilfield in Iraq in June, the newspaper said.

Jiang Jiemin, general manager of CNPC and chairman of PetroChina, said last month that the firm would start to develop Halfaya in the second half of this year.

Iraq awarded the service contract to develop Halfaya in late January to CNPC, France's Total and Malaysia's Petronas, with a service fee of $1.4 per barrel and a plateau production target of 535,000 barrels per day from a current 3,100 bpd.

CNPC and its partner British Petroleum is making plans to take over the Rumaila oilfield in Iraq before June 30 and will ramp up production by 10 percent by the end of this year, the report said.

Construction at Ahdab oilfield in Iraq is processing well after drilling of the first well started in May 2009, the report said.

Ahdab is the first major oilfield awarded to foreign developers in Iraq after Sadam Hussein was toppled. – Reuters