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China is welcome to explore oil resources in Iraq as a new law is set to open its oilfields to international companies, the Iraqi ambassador to China said yesterday.

"We encourage Chinese enterprises to join the multinational competition for exploration of Iraqi oilfields," said Mohammad Sabir Ismail.

The oil and gas law faces a parliamentary vote next month after Iraqi Prime Minister Nouri al-Maliki endorsed it in February and the Cabinet approved it the following month.

If ratified, it will open the country's oil resources to foreign companies; and a frozen Sino-Iraqi oil contract could be reactivated, he said.

The 1997 deal to explore the Al-Ahdab field, worth $1.2 billion, was signed by China National Petroleum Corp and Baghdad when Saddam Hussein was in power.

Under the terms of the new law, all energy contracts signed by foreign producers during the Saddam era must be renegotiated.

"The revival of the deal is in the process and the two sides have established working groups to help the contract go forward," he said.

Ismail said Iraq's ambition is to exploit about 80 new oilfields in the coming years and produce 6.5 million barrels of oil per day by 2015.

It produced 2.6 million barrels a day before the 2003 US-led invasion. Production is about 2 million barrels a day at present.

The ambassador made the remarks on the eve of Iraqi President Jalal Talabani's week-long state visit to China starting tomorrow.

Talabani is scheduled to meet President Hu Jintao, top legislator Wu Bangguo and Premier Wen Jiabao.

The two sides are expected to sign five agreements on foreign affairs, the training of governmental officials and other spheres.

China is ready to substantially forgive debt owed by Iraq and will provide additional reconstruction aid to the country, the ambassador said without specifying the amounts.

He noted that a Sino-Iraqi joint committee, to be co-chaired by the Iraqi Oil Ministry and the Chinese Ministry of Commerce, will resume discussions on such sectors as trade, foreign affairs, science and technology. The joint committee held its first meeting in 2001.

The upcoming visit by the Iraqi president will be the first by an Iraqi head since the two countries set up diplomatic ties in 1958. Accompanied by five Cabinet members, the president and his 40-strong delegation will visit Beijing, Xi'an and Nanjing.

Touching on bilateral ties, the ambassador said the friendship between China and Iraq dates back 2,000 years.

"There has never been any conflict between the two countries," he said.

On trade, he said "made-in-China products are common in Iraqi households, especially toys", adding that the economies of the two countries are highly complementary.

Ismail said he hopes two-way trade increases on the back of $1.1 billion last year.

Chinese analysts described Talabani's visit as a "landmark".

Yin Gang, a researcher with Chinese Academy of Social Sciences, said the visit shows that cooperation in various fields is returning to normal.

He said Talabani, who is interested in the works of Mao Zedong, has been to China before and has great affection for the country.