A joint venture lead by Japan’s JGC is in talks with US oil major ExxonMobil for the first major engineering, procurement and construction (EPC) contact at the West Qurna phase-1 oil field in the south of Iraq.

JGC partnered with the UK’s Petrofac for the construction of a 100,000 barrel-a-day (b/d) crude oil processing facility, which is estimated to be worth around $150m, according to sources close to the project.

ExxonMobil has previously only tendered relatively small EPC deals, such as gas flaring systems and oil storage tanks, with bids received only from local firms. If signed, the JGC-Petrofac deal would be its first international contract.

The US firm leads the development of the 8.6-billion-barrel field, along with UK/Dutch oil major Shell Group. The pair originally signed a contract with the Iraq Oil Ministry to increased production to more than 2.8 million b/d by 2017, from only 279,000 b/d in 2009. However, they are now in talks to reduce the production level in line with Iraq’s lower overall targets.