TEHRAN -- China is to invest $2.5 billion in South Azadegan oilfield on Iran’s side of the Iraqi border.

The field currently produces 55,000 barrels per day and it is expected to increase output to 320,000 bpd after the completion of the first phase of the project. The project is already underway.The completion of the second phase will boost output to 600,000 bpd.In 2009, the China National Petroleum Corporation (CNPC) and the National Iranian Oil Company (NIOC) signed a $1.76 billion deal to develop the North Azadegan oilfield.The North Azadegan oilfield is expected to produce 75,000 bpd.It is estimated that the Azadegan oilfield has a 42 billion barrel reserve.Chinese oil firm Sinopec is currently engaged in the Yadavaran oilfield which is adjacent to Azadegan oilfield.Iran produces about 3.7 million bpd and is the third largest exporter of crude oil to China.Iran is OPEC's second largest producer of oil after Saudi Arabia