China National Petroleum Corp, the country's biggest oil producer, said that the first phase of Iraq's Halfaya oilfield started operations 15 months ahead of schedule.

The facility has an estimated annual production capacity of 5 million tons.

Preliminary work has started on the second phase of the oilfield, which will have an annual production capacity of 10 million tons.

The oilfield is CNPC's largest overseas project as an operator.

In 2010, Iraq signed a contract with CNPC, France's Total and Malaysia's Petronas to develop the oilfield. The service fee is $1.4 a barrel and CNPC has a 37.5 percent interest in the consortium.

CNPC was the first foreign oil company to sign an oil contract in Iraq after former president Saddam Hussein was removed from power.

dujuan@chinadaily.com.cn