UK engineering firm DPS Global has been awarded a $38.6m contract to supply and install an effluent water treatment and injection plant at the Bai Hassan oil field in the north of Iraq.

The deal was awarded by state-owned North Oil Company (NOC) in early July, according to sources close to the project.

The 2.3 billion-barrel field is located in an area contested by the semi-autonomous Kurdistan Regional Government (KRG) and Baghdad, near the giant Kirkuk oil field. Bai Hassan has been producing since 1960 and was included in Iraq’s first oil and gas field licensing round in 2009. It received only one bid, from a consortium led by US oil major ConocoPhillips.

This is DPS’ second contract in Iraq this year. In April, the firm was awarded a contract for the expansion of the Khurmala Dome formation of the Kirkuk oil field. The Khurmala Dome is currently operated by the local KAR Group under a contract with the KRG.

DPS will carry out a study to debottleneck the existing Khurmala Dome facility and to increase production capacity to 40,000 barrels a day (b/d). It will then design a central processing facility in 2014 to add another 60,000 b/d, taking total production up to 200,000 b/d. It will also oversee the construction of a new gas treatment plant.