DUBAI: Kuwait and Iraq signed an agreement on Friday with British energy advisory firm ERC Equipoise to prepare a study for the development of joint border oilfields, Kuwait's state news agency KUNA said.

The contract, which will study how the fields can be developed and exploited, was signed between officials of both Gulf states in Jordan and is expected to last for up to two and a half years, KUNA said.

There are several oilfields in the border area between Iraq and Kuwait, including Ratqa, which is a southern extension of Iraq's giant Rumaila field.

Production from cross-border oilfields has long been a source of tension between Iraq and Kuwait, which are members of the Organization of the Petroleum Exporting Countries.

In the build-up to Iraq's 1990 invasion of Kuwait, Baghdad accused Kuwait of drilling wells that crossed the border and pumped oil from Iraqi territory. Kuwait denied the allegation.

Kuwait's Oil Ministry Envoy Sheikh Talal Nasser al-Izabi Al Sabah said the contract signing was the result of six years of hard work between the two countries.