Iraq is in talks with foreign oil companies to build an oil refinery near the city of Kerbala and Italy's ENI has expressed interest in the project, Iraq's deputy oil minister said on Tuesday.

The project is valued at $4 billion to $4.5 billion, Deputy Oil Minister Ahmed Al-Shamma said.

"There is a group that was formed by the name of Kerbala Refineries to invest in the project. ENI mentioned that it supports the project," Al-Shamma said. "ENI has the ability to construct."    

Al-Shamma said a Gulf bank had also expressed interest in the project but did not name it.

ENI is one of the foreign oil companies involved in raising production from dilapidated oilfields as Iraq  tries to increase production capacity to 12 million barrels per day by 2017. - Reuters