The Iraq government is to sign a deal with Royal Dutch Shell, it has emerged.

On Sunday, the Iraqi cabinet announced the decision to invest in the joint venture that will involve the tapping of natural gas in the southern region of the country.

The agreement will involve the state-run South Oil Company and Shell, with the former controlling 51 per cent of the venture and the latter having the remaining 49 per cent.

Oil Ministry spokesman Asim Jihad informed Reuters: "Now we have approval from cabinet, the Oil Ministry will invite Shell to ink the gas deal in Baghdad within a month."

New facilities will be built under the deal to help gain access to the gas.

This news follows the revelation that China has secured the first post-Saddam Hussein oil deal.

By reviving a 1997 concession to exploit reserves on the al-Ahdab field south of Baghdad, China clinched the deal.

Iraq has the third largest oil reserves in the world.

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