Iran and Iraq have reached a deal to jointly develop two shared oilfields in the Islamic Republic’s southern Khuzestan Province, according to an Iranian media report.

"We are collaborating with Iraq for some (joint) fields. An agreement has been made to integrate the development of two small oil fields in the city of Khorramshahr (bordering Iraq)," Gholamreza Manouchehri, deputy for development and engineering at the state-owned National Iranian Oil Company (NIOC), has been quoted as saying by the Iranian Students News Agency (ISNA).

Manouchehri did not disclose which fields were being considered or the framework of the agreement. In September last year Iraqi Oil Minister Jabbar al-Luiebi had said that Baghdad would soon sign a deal with Tehran to jointly invest in two oil fields.

In July 2017 MEED reported that Iraq began producing oil from the Huwaiza oil field it shares with Iran.

A bulk of Iran’s oil and gas reserves are concentrated in areas neighbouring Iraq, with which Iran shares over 1,400 kilometers of border in the west.

Iran is also hoping to sign a contract to develop its Azadegan oil field, a giant deposit of 33 billion barrels of crude that lies near Iraq's Majnoon oil field in the oil-rich Basra Governorate.

Manouchehri said efforts are underway to launch a tender for Azadegan, which was singled out as the first development project to be tendered since Tehran unveiled on its new model of contracts, known as the Iran Petroleum Contracts (IPC), in late 2015.

Azadegan is located in the West Karoun oil block that holds around 67 billion barrels of crude.