The West Qurna-2 field covering an area of 340km² has recoverable oil reserves of around 14 billion barrels.
Lukoil president Vagit Alekperov said that a full-scale investment in the project will reach about $25bn.
"Upon reaching the production volume of 150,000 barrels per day, Lukoil will receive the right to reimburse expenses and receive remuneration," added Alekperov.
"After the initial expenses are reimbursed, the project will turn into a self-financing entity."
The company said it plans to drill 23 directional wells at the oil field.
The project’s shareholders include Lukoil with 56.25%, Iraq’s state-owned North Oil Company with 25 % and Statoil with 18.75%.
