China National Petroleum Corp (CNPC), the country's largest oil and gas company, yesterday signed a $1.76 billion agreement to develop an oilfield in Iran.

The company will develop the North Azadegan oilfield, located in Iran's western province of Khuzestan. The field has estimated reserves of 6 billion barrels of oil and can produce 75,000 barrels per day for 25 years, according to the Iranian Oil Ministry.

The deal is in the form of buy-back terms, under which CNPC will develop the field and hand over operations to Iran. CNPC will also receive payment from oil production for a few years to cover its investment.