(Yicai) May 23 -- Shares of Jereh Oilfield Services Group surged after the private Chinese firm said it has allied with an Iraqi partner to provide developing services for Iraq's second-largest gas field for 25 years.

Jereh Oilfield [SHE: 002353] soared 4.9 percent to CNY34.50 (USD4.86) a share as of lunch break in Shenzhen today.

Jereh Oilfield and Petro Iraq for Oilfield Development have agreed to become project contractors and offer development services for Mansuriya, the Yantai-based firm announced late yesterday. The pair and project owner Midland Oil have preliminarily penned a development and production deal, it added.

Midland Oil will hold a 51 percent stake in the project, while the two contractors will own the rest, Jereh Oilfield noted. The three companies will provide the funds for the project's development and collect corresponding returns based on their equity, it pointed out.

Jereh Oilfield will also serve as the project's operator, it said, without revealing if it will gain extra service remunerations. The firm did not disclose its stake, investment, and likely revenue from the project.

The two contractors will submit preliminary development plans within six months after the deal takes effect, Jereh Oilfield noted. Development on the project will then kick off three years after the plans are approved and the necessary workloads are finished, it added.

Midland Oil is managed by Iraq's Ministry of Oil. The country is trying to increase the development of natural gas resources to satisfy local users' demand and fully utilize resources related to projects such as Mansuriya.

The project, which is still pending approval from relevant authorities in Iraq and China, will enhance Jereh Oilfield's brand awareness in the Middle East, the company noted, adding that this will lay a solid foundation for its further expansion in overseas markets.

Jereh Oilfield has been expanding towards overseas markets in recent years, establishing long-term partnerships with Saudi Aramco, Abu Dhabi National Oil, Kuwait National Petroleum, and many other Middle Eastern oil and gas giants.

Editor: Martin Kadiev