Exxon Mobil has allocated $1.65 billion to develop Iraq's West Qurna oilfield in 2013, up from $1.6 billion last year, the head of the joint management committee for the field said.

An Iraqi oil ministry official said the budget indicated Exxon's commitment to developing the southern field in 2013, which it offered to sell out of last year after rilingBaghdadby signing six deals with the autonomousKurdistanregion.

Baghdadrejects contracts granted by the northern enclave as illegal and told Exxon it had to choose between the $50 billion West Qurna-1 project and its Kurdish assets, offering theUSmajor sweeter terms in a bid to keep in the south.

"Under the work programme approved for 2013 by the oil ministry, Exxon has set $1.65 billion to developWest Qurna," Madhi Abdul Razzaq of the management committee told Reuters.

In line withIraq's service contract terms, oil companies must submit a work plan including development budget to the oil ministry before the start of the year for approval.

"If Exxon were not interested to keep working inWest Qurnathen it will not spend a huge investment of $1.65 billion to keep developing the field," the oil ministry official said on condition of anonymity because he was not authorised to speak to the media.