Reporting from Baghdad - The Iraqi government Thursday signed a deal with a consortium led by U.S. oil giant Exxon Mobil Corp. to develop a major oil field in southern Iraq, marking the first entry by an American-dominated group into Iraq's oil industry since it was nationalized in 1972.

The deal coincides with a flurry of activity this week that suggests major oil companies are finally poised to return to Iraq, more than six years after the U.S.-led military invasion raised firms' hopes of gaining access to some of the world's largest and most underdeveloped oil reserves.


This week, a group led by Italy's Eni that includes the U.S. company Occidental Petroleum Corp. initialed a preliminary agreement, and Britain's BP and China National Petroleum Corp. finalized an accord to develop oil fields in the south.

The deals are service contracts. That means the consortia will invest money to improve the yields of the fields and receive in return a fixed fee. The agreements came after the oil companies dramatically lowered their fees to match those offered by the Iraqi government at a public auction in June.