Iraq’s state-owned Basra Oil Company (BOC) has announced it has started development work on the country’s Majnoon oil field with US energy company Chevron.

The Iraqi oil ministry in June said BOC had signed an agreement with Chevron to allow the US firm to conduct technical studies and prepare a development plan for oil fields in the country’s Basra and Dhi Qar governorates, including the Majnoon asset.

The agreement between the two sides also calls for the formation of a joint venture (JV) firm that will work on the appraisal of assets and developing the oil sector in the region.

According to the latest statement, Chevron has completed the initial studies for the Majnoon field.

The proposed JV entity will be responsible for executing three key work stages on the Majnoon project: field development, preparation of reservoir studies and starting production operations.

In addition to undertaking oil production and treating associated gas at Majnoon, the JV has been tasked with setting up an oil refinery at the development.

BOC has no financial obligations for the project. As the cooperator, Chevron will have to bear the risk of investment into Majnoon, the statement said.

Earlier in August, BOC awarded UK energy contractor Petrofac a contract to work on the expansion of the Central Processing Facility part of the Majnoon project.