*

Iraq and Exxon sign non-binding deal

*

Includes development, export upgrades, profit-sharing

-sources

*

SOMO to secure Asian storage capacity with Exxon

(Adds that Iraq and Exxon have signed agreement, prime minister

said)

By Aref Mohammed and Ahmed Rasheed

BAGHDAD, Oct 8 (Reuters) - Exxon Mobil ( XOM ) signed an

agreement with Iraq on Wednesday to help it develop its large

Majnoon oilfield and expand its oil export infrastructure,

marking a return to the country two years after leaving.

OPEC's second largest producer is looking to draw back

Western oil majors and increase output constrained by years of

war, corruption and sectarian tensions.

Iraqi Prime Minister Mohammed Shia al-Sudani announced that

a deal was signed with Exxon but included few details.

It will involve a profit-sharing agreement covering crude

oil and refined products and plans to upgrade Iraqi oil export

infrastructure in the south, according to four sources with

knowledge of the matter.

Iraq's state oil company SOMO will also sign an agreement

with Exxon to secure storage capacity in the Asian market, the

sources said.

SOMO and Exxon did not immediately respond to Reuters

requests for comment.

Iraqi state news agency INA reported in September that SOMO

was in advanced talks with Exxon over a possible agreement to

secure storage capacity in Singapore using tanks owned by the

U.S. oil major.

In the past two years, Iraq has signed agreements with oil

majors that had previously left, including Chevron ( CVX ),

France's TotalEnergies and the UK's BP.

Exxon was one of the first Western oil firms to enter Iraq

to develop oil fields after the U.S. invasion in 2003. But it

left the West Qurna project due to what sources described as

poor returns.

It also tried to develop fields in Iraq's semi-autonomous

region of Kurdistan despite Baghdad's ire but also left those

projects due to what sources said were poor exploration results.

After exiting Iraq's giant West Qurna 1 oilfield, Exxon

transferred its remaining stake and operatorship to PetroChina

, which became the lead contractor.

In September, Iraq's federal government reached an agreement

with the Kurdistan Regional Government (KRG) and international

oil companies to resume crude exports through Turkey that were

suspended in 2023.

That is expected to eventually return up to 230,000 barrels

per day to international markets at a time when OPEC+

oil-producing countries are boosting output to gain market

share.