Iraq started drilling the first well in the Huwaiza oil field near the Iranian border, which may contain one billion barrels in reserves
The field is being developed by state-run Maysan Oil Company which oversees the oil and natural gas industry in the namesake region, the ministry said in a statement.
OPEC's second largest producer, after Saudi Arabia, Iraq seeks to boost its production capacity to 5 million barrels per day by the end of the year, from about 4.7 million bpd now.
The country produces 4.3 million bpd, lower than its capacity, in line with an agreement between oil exporting countries to curb supply in order to support crude prices.
Oil Minister Jabar al-Luaibi attended the well drilling launch at Huwaiza and also a ceremony marking the beginning of the expansion work in the Halfaya oil field, also in Maysan, according to separate oil ministry statements on Sunday.
The expansion will double Halfaya's capacity in 2018 to 400,000 barrels per day. The field is operated by PetroChina.