BAGHDAD, (AP) – Iraq and China will sign a deal next week to develop the Ahdab oil field, restoring an agreement that was canceled after the 2003 U.S.-led invasion, an Iraqi spokesman said Thursday.

The governor of Wasit province, where the billion-barrel field is located, left Wednesday for China to join Iraqi Oil Minister Hussain al-Shahristani at the ceremony in the next few days, provincial spokesman Majid al-Atabi said.

“The governor will discuss the logistic cooperation with the Chinese company, especially the security side,” al-Atabi told The Associated Press in a phone interview.

The Shiite-dominated Wasit province, about 100 miles southeast of Baghdad, has been the scene of sporadic attacks since the U.S.-led invasion in 2003.

Saddam Hussein’s regime defied United Nations sanctions that limited direct dealings with Iraq’s oil industry and signed a deal in 1997 with the state-owned China National Petroleum Corp.

That contract, worth $1.2 billion, gave a subsidiary of the Chinese company concessions to develop the field on a production-sharing basis for 22 years.

The new agreement will be a service contract, under which China will not be a partner in profits and instead will be paid for its work.

Once the contract is signed, it will be the first Saddam-era oil deal to be honored by the new Iraqi government. A number of companies say they signed deals with Saddam’s regime and demand that those be honored, or the countries involved be given priority on new agreements.

The ministry has consistently denied giving any advantage to companies with which Saddam signed deals, instead insisting that oil and gas fields and exploration blocks will be offered up for bids.

Iraq sits on more than 115 billion barrels of oil, but decades of wars, U.N. sanctions, violence and sabotage have battered its oil industry.

As security improves, Iraq is trying to bring in foreign companies to help increase crude output from the current 2.5 million barrels a day to 3 million barrels a day by the end of 2008, and 4.5 million barrels a day by the end of 2013.