Iranian and Iraqi oil officials have reportedly reached an agreement to develop their joint oilfields on border areas to increase their crude output, Press TV reported.
"The two neighboring states have signed an agreement for the development of joint oilfields," Mehr news agency reported on Sunday.
The deal was inked during the first meeting of the two countries' joint executive working group in the Iranian capital, Tehran, the report added.
Based on the new deal, Iran and Iraq will set up joint expert committees to finalize technical and financial details of the agreement to develop the joint oilfields.
According to the report, Iran and neighboring Iraq have 23 joint oilfields on border regions.
The next round of oil talks between the two countries will be held in the Iraqi capital, Baghdad, in March.
Earlier, Iran's deputy Oil Minister Alireza Zeighami said that the two neighbors had reached an agreement on preparing comprehensive plans for the development of five joint oilfields.
Iran and Iraq are members of the Organization of Petroleum-Exporting Countries (OPEC) which supplies about 40 percent of the world's oil.
In November, Iran unveiled plans to develop its joint oil and gas fields with neighboring countries even without foreign investment.
"We will not sit idly in protracted negotiations with foreign companies," said Iranian deputy Oil Minister Mohsen Khojastehmehr.
Khojastehmehr said Iran has finalized a plan for the speedy development of the joint oil and gas fields, adding that Iran will start drilling at Azar oil field -- with a proven 2 billion barrels of oil reserves -- near the Iraqi border.
National Iranian Oil Company (NIOC) director of exploration Mahmoud Mohaddes said that the oil-rich country plans to explore new reserves of 500 million barrels of oil and 5 trillion cubic feet of gas per year in a five year plan.
He further pointed out that Iran has discovered 19 new oilfields and eight new gas reserves during its Fourth Five-Year Development Plan (2005-2010).
In 2009, Iran's crude production stood approximately at 3.8 million barrels per day.