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US super major ExxonMobil and its Anglo-Dutch peer Shell, today signed a final contract for the development of Iraq's 8.7-billion-barrel West Qurna Phase One oilfield

The partners, who will work with an Iraqi state-run oil company, won the right to develop the super giant field in negotiations with the Oil Ministry last year following Iraq's June oilfield auction, the first since the 2003 US invasion, a Reuters report said.

ExxonMobil's regional vice president Richard Vierbuchen and Shell Gas & Power vice president Mounir Bouaziz signed the deal in the presence of Iraqi Oil Minister Hussain Shahristani in Baghdad.

The companies plan to increase output from the oilfield to 2.325 million barrels per day from its current level of 279,000 bpd.

It is one of several deals following two oil contract auctions last year that have the potential to take Iraqi capacity to 12 million bpd - rivaling top producers Saudi Arabia and Russia - from 2.5 million bpd now.

Awash with oil, Iraq is poised to ink several mega oil deals that will vault it into the top ranks of world oil producers, but the war-shattered country is back to grappling massive power shortages after a brief respite.

Peak winter consumption of electricity due to heaters being run has resulted in what appears to be a near collapse of the public power supply - those without generators to light their homes are only getting a few hours of electricity per day.

"Citizens have to reduce their consumption if they want more hours of power," Aziz Sultan, a spokesman of the Electricity Ministry, said on Thursday. "Now we are experiencing the peak electricity load of the winter season. Citizens are consuming double our electricity output."

Years of war, sanctions and underinvestment have severely degraded Iraq's power grid and plants. Intermittent electricity, especially in the searing heat of the Iraqi summer, is a source of endless anger for Iraqis who live on top of the world's third largest oil reserves.

The Electricity Ministry has often borne the brunt of complaints over shoddy public services for failing to fix the shortages almost seven years after the 2003 U.S.-led invasion.

For a while during the fall, it seemed as if the power problems had been cured. Public electricity had been running for what seemed like most of the day and the usual steady throb of generators faded into the background as cooling demand faded.

But in the past two weeks the situation has returned to the bad old days as demand for heating surges, meaning the generators only fall silent for a few short hours per day.

That has coincided this week with Iraq's second auction of oilfield development contracts since the fall of Saddam Hussein.

Ten largely untapped oilfields, including some of the world's biggest, will be offered to global oil companies on Friday and Sunday, potentially helping to catapult Iraq to third place among global oil producers from 11th now.

IRRITATING CONTRAST

For many Iraqis, the promise of so much oil wealth contrasts irritatingly with the state's failure to give them electricity.

"The power cuts are destroying us. It's more than six years after the war and it's as if we are in the first year of it," said Baghdad resident Mohammed Muhsin. "Electricity is our lifeline. Without it life becomes so difficult."

Sultan said the public power grid's capacity to produce 7,000 megawatts falls far short of demand of 12,000 megawatts. Multibillion-dollar deals for new electricity turbines from General Electric and Siemens AG capable of adding 9,000 megawatts of capacity are still in the pipeline.

He declined to say how many hours per day of electricity were being provided, but said supply had also been constrained by the need for routine maintenance before next summer on power plants.

"The people are not helping us. In winter, oil and gas are available (for heating) and they could use them, but they insist on using electricity," he said.

Sultan said the ministry planned to implement a rationing system to encourage people to conserve energy.

Any household consuming more than around $45 worth of power every two months would be cut off. They would have to pay to be reconnected.

The Central Bank of Iraq (CBI) dollar sales rose by 55% to reach $227.190 million in its daily auction on Thursday, compared to $155.251 million during the previous session.

“The demand hit $16.480 million in cash, covered at exchange rate of 1,170 Iraqi dinars per dollar, and $210.710 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.

None of the 17 banks that participated in today’s session offered to sell dollars.

The Central Bank of Iraq runs a daily auction from Sunday to Thursday.