The oil produced from the Ahdab field will help Iraq, a nation where electricity is in short supply, fuel a planned power plant that would be one of the largest in the country.

For China, the deal offers a lucrative foothold in one of the most oil-rich countries in the world.

“There are some political profits for China,” said Ibrahim Bahr al-Ulum, a former Iraqi oil minister. “They need access to Iraq, and when they need oil, at least the Iraqi people will feel that China has done something for them.”

Mr. Jihad said that the contract was the first major agreement to be completed because the Chinese company had “wide experience in this field” and because many foreign oil companies were not willing to come to Iraq.

He said that China would be paid in money, not oil, as is the case in some contracts.

Before 2003, Iraq had oil agreements with China, Russia, Indonesia, India and Vietnam, three of them production sharing. Iraqi officials have said that they are reconsidering the terms of these agreements because of the increased price of oil, a new government and other changes since the fall of Mr. Hussein’s government. Iraq says that the contract with the Russian oil giant Lukoil for one of Iraq’s largest oil fields was canceled by Mr. Hussein.

The government is also negotiating service contracts with ExxonMobil, Shell, Total, BP, Chevron and some smaller oil companies. The length of the agreements was reduced to one year from two after Iraq drew wide criticism for not putting the contracts out for competitive bidding.