Iraq's cabinet approved a $358.8 million contract with Dubai-based Drake and Scull and Italy's Sicim to lay pipelines in the southern Zubair oilfield, said a government spokesman.

The deal is part of a series of contracts aimed at developing Zubair which officials say should have an output of 1.2 million barrels per day by 2017.

Under the two-year extendable deal, the consortium will lay pipelines to transport crude from oil wells to production facilities, will lay water injection pipelines and will replace old lines in the field, Ali al-Dabbagh said.

The group will also build an 18 km pipeline to carry oil exports from Zubair to a crude storage depot, an Iraqi oil ministry document showed.

Opec member Iraq aims to double its output over the next three years after decades of neglect of infrastructure due to war and economic sanctions.

Italy's ENI, US-based Occidental Petroleum Corp and South Korea's Kogas signed a 20-year deal with Iraq in 2010 to develop Zubair, whose production is currently at 270,000 barrels per day (bpd).-Reuters