Kuwait and Iraq have agreed "in principle" on a deal to regulate production from the border oil fields that once caused conflict between the two Arab states, the Kuwaiti oil minister said Wednesday.

The deal follows technical negotiations between the two nations and "we have agreed in principle. Kuwait signed the deal and they [the Iraqis] will be signing it this or next week," Sheikh Ahmad Abdullah al-Sabah told reporters.

The deal calls for "a unified international company to drill for oil," on the joint border fields, the minister said.

It also allows international oil companies "to come and agree with both countries to drill at the same time for the same field," he said.

"It's to avoid future claims that one of these countries is overutilizing this kind of joint fields," said Sheikh Ahmad.

A number of oil fields lie on the border between the two Arab countries, including Iraq 's giant Rumaila, which extends into Kuwait , where it is known as Ritqa. There are other such fields in Zubair and Safwan.

Most of Iraq 's current production of 2.5 million barrels a day comes from Rumaila, which has a daily production of around 1.5 million bpd, while Kuwait 's production from Ritqa is just under 50,000 bpd.

The two sides have in the past traded accusations of oil theft, although Kuwaiti officials have repeatedly denied Iraqi charges that the emirate has been producing illegally from border fields.

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