(Yicai Global) June 24 -- Chinese oil exploration and mining company Zhongman Petroleum and Natural Gas Group recently penned a USD40 million drilling project contract for the East Baghdad Field in Iraq.

The value of this agreement represents about 19.8 percent of the company's annual operating income for last year, it announced today.

Zhongman's shares [SHA:603619] fell by 1.7 percent to close at CNY19.7 (USD2.90) today.

The project belongs to Beijing-based Zhenhua Oil, and it is the first cooperation project in Iraq between Zhongman and Zhenhua. The cooperation will raise Zhongman's standing in the local market and positively impact its operating performance next year and in 2020, the Shanghai-based company said.

Zhenhua is a large firm that owns and operates 11 oil and gas exploration zones in Kazakhstan, Iraq, Egypt, Myanmar and Pakistan, and controls a geological reserve of 1.3 billion tons, information on its website shows.

Editor: Ben Armour