(Karachi) Iraq is all set to sign a multibillion-dollar contract with China's ZhenHua Oil Co. as part of a bailout package from Beijing, Bloomberg reported on Wednesday. The deal will help Iraq to receive money upfront in exchange for long-term oil supplies and steer it out of the financial economic crunch.

As per details, Iraq's economy suffered a blow after oil demand and prices lowered leaving the cash-strapped country in a crisis pay salaries.

The Iraqi agency handling petroleum exports, SOMO, has picked ZhenHua, for the mega deal. However, the pact will be finalized after approval from Iraq’s cabinet. Commenting on the matter, Cabinet Spokesman Hassan Nadhim said the offers were being studied and would go to the prime minister for approval.

Under the terms of a letter SOMO sent to oil traders last month, the winning bidder will buy 4 million barrels a month, or about 130,000 a day. They will pay upfront for one year of supply, which at current prices would bring in more than $2 billion. The deal runs for five years in total -- but the upfront payment is only for one year.

The deal attracted widespread interest among the top names of the oil-trading industry while the deadline for the tender was extended from late November to allow market participants more time to bid.