The governments of Iraq and Iran have agreed to cooperate on the Naft Shahr and Khorramshahr shared oil fields, which are located in Iranian territory on the border with Iraq in the Khuzestan province. For this purpose, they will set up a a partnership between Tehran’s Oil Industries Commissioning and Operation Co. (Oico) and its Iraqi counterpart. The integrated development of the fields is expected to help the two countries cut production costs and monetize the assets in a more efficient way.
This agreement is seen as the first step of a wider cooperation between the two countries in various sectors such as gas, electricity and oil amidst plans to boost bilateral trade from the current US$12bn to US$20bn. Iran has agreed to help Iraq with engineering and technical services in the oil sector. Iran would also help its neighbour develop mutual fields, rebuild refineries and build a gas transmission network. In March 2019, the United States granted Iraq a 90-day waiver exempting it from sanctions on buying energy from Iran.