PetroChina will start work to develop the giant Iraqi oilfield Halfaya in the second half of this year after the newly awarded contract has taken effect, chairman Jiang Jiemin said on Friday.

"Halfaya contract has already taken effect. Our Iraqi team has been set up ... The real work on the ground will start in the second half of the year," Jiang told reporters on the sidelines of China's annual parliament meeting.

PetroChina, France's Total and Malaysia's Petronas clinched the final contract for Halfaya in late January, with a service fee of $1.4 per barrel and a plateau production target of 535,000 barrels per day from a current 3,100 bpd.

Halfaya and Rumaila -- another massive Iraqi field that PetroChina was awarded -- will allow the Chinese top energy firm access to a total of some 21 billion barrels of oil reserves in Iraq.

The two service contracts have been touted inside the Chinese firm as its biggest feat in its nearly three-decades' long overseas drive.   

Jiang also said it would take "a fairly long" time to finalise the purchase agreement for a deal to buy 2 million tonnes of liquefied natural gas (LNG) per year from Qatar, after PetroChina and Qatargas signed a memorandum of understanding for the supply last November.   

"It's because of the uncertain global LNG prices," said Jiang, without elaboration.   

The Chinese firm had already agreed in 2008 a 3 million-tpy long-term deal with Qatargas.  PetroChina, the country's top gas producer but a relative newcomer in the LNG business, is poised to start operating its first two receiving terminals next year, one in the northeastern port Dalian and the other in eastern Jiangsu province, Jiang said.   

Jiang also said he expected PetroChina to post a better profit this year than last and the firm had achieved a reserve replacement ratio of more than 100 percent for oil and 300 percent for gas last year.

Jiang did not give a 2009 profit figure. PetroChina posted weaker-than-expected earnings for July-September 2009 at 30.8 billion yuan. - Reuters