The West's biggest oil companies are in talks with the Government of Iraq to boost the country's oil and gas output.

Under a specially designed technical services agreement, ExxonMobil, Chevron, ConocoPhillips and Shell would be paid in oil rather than cash to help to develop the fields.

The decision, which is politically highly charged in Iraq, would involve the oil majors taking on the role of special contractors to the Government. The agreements would cover a variety of oil and gasfields in western, southern, central and northern Iraq. Shell, for example, is interested in the Akkas gasfield in Anbar and another gasfield in the south of the country.

The Iraqi Oil Ministry has designed the contracts to encourage Western oil companies to provide training, equipment and expertise to help Iraq to meet a target of increasing production to 2.6 million barrels by the end of this year and 2.8million within two years, from about 2.4million now.

Officials from several oil companies have been meeting Iraqi officials in Amman, Jordan, in recent weeks to fix the terms. The companies involved would be favoured in bidding for longer-term contracts on the fields - which are some of Iraq's largest producers - set for this year. Another bidding round is expected to take place next year.

At an estimated 115billion barrels, Iraq's oil reserves are the third-largest in the world after Saudi Arabia and Iran.

However, a long-running political dispute with the Kurdistan Regional Government in Northern Iraq has delayed the introduction of a hydro-carbon law, which would direct how the funds raised would be used and whether they would go to central government in Baghdad or the regional administrations.

Security remains a key concern and most of the work is likely to be carried out by Iraqis or other Arab citizens rather than by expatriates.

— Kuwait has revealed plans to spend $51billion (£26billion) over the next five years to upgrade its oil and gas industry. Saad al-Shuwaib, the chief executive of Kuwait Petroleum Corporation, said that the Gulf state planned to spend the cash on a range of projects in the energy sector, which generates 95 per cent of the country's revenues. He said that the projects include raising Kuwait's oil output capacity from 2.7million barrels per day (bpd) to four million bpd by 2020, as well as building a large refinery and upgrading existing refineries.

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