The American energy giant ExxonMobil today won the right to develop one of the world's most prized untapped oil reserves, in a $50bn (£30bn) deal that will entrench the company as one of the largest players in postwar Iraq.

Exxon was awarded a contract to extract oil from the West Qurna reservoir near Basra in Iraq's south during an extended tender process that has seen the Iraqi government partner foreign firms in a bid to get its reserves of oil out of the ground as cheaply and quickly as possible.

West Qurna was considered the jewel in the nine Iraqi oil and gas fields up for grabs, with verified reserves of 15bn barrels and a strong chance that exploration will reveal significantly more.

Iraqi oil minister Hussain Shahristani said the contract stipulated a $25bn investment and $25bn more in operating fees. It is also expected to yield up to 100,000 jobs in the impoverished deep south of the country that was heavily blighted by insurgency throughout the past five years.

"Iraq will get great benefits from developing the sector and providing services for the people," said Shahristani in Baghdad's oil ministry. "After decades of oppression and tyranny, Iraq is getting back its riches for this generation and for the next."

ExxonMobil, the world's largest publicly traded oil company, has agreed to ramp up oil production from current levels of 270,000 barrels a day to 2.25 million barrels a day, within seven years, after which a licence fee of $1.90 a barrel will be paid by the Iraqi government. In the opening round in July, BP and CNPC won the rights to develop the Rumaya oilfield, also near Basra. Oil is seen by most in government as Iraq's meal ticket.

Iraq has verified reserves of around 115bn barrels, which is widely seen as enough to kick-start its brittle economy and potentially transform the services-deprived south and north of the country into economic strongholds.

But the country's oil infrastructure is around 50 years old and does not have the capacity to extract oil at sufficient daily levels to compete with neighbouring producers. The deals it is striking with foreign firms allows them to get the oil out of the ground and pays a licence fee once efficiencies are reached. However, Iraqi officials have been at pains to insist that they still control the country's oil sector.

ExxonMobil was awarded 80% of the West Qurna contract, with Shell. A second licensing round is scheduled for December, in which contracts to develop up to five more fields are up for grabs. The president of ExxonMobil Upstream Ventures, Richard Vierbuchen, was in Baghdad to sign the contract.

• This article was amended on 6 November 2009. ExxonMobil has agreed to increase oil production to 2.25 million barrels a day, not 2.25 billion. This has been corrected.