LONDON-- BP PLC said Thursday it reached an agreement with the Iraqi government to lower the production target for the vast Rumaila oil field and extend a BP-led group's time frame to manage the resource.

BP signed a deal in 2005 to boost Rumaila's production from less than 1 million barrels a day at the time to 2.85 million by 2016--a goal which BP said would have made it the world's second-largest producing field, behind Saudi Arabia's supergiant Ghawar field. Rumaila currently produces about 1.3 million barrels a day, a BP spokesman said.

More recently, the Iraqi government has been negotiating to lower production targets for several fields, including Rumaila. Iraqi Oil Minister Abdul Kareem Luaiby said in December that the government was working to renegotiate the Rumaila deal.

BP said Thursday that under the new agreement it plans to bring production to 2.1 million barrels a day "within the next decade," while its deal to run Rumaila has been extended by five years, to 2034.

BP has a 38% stake in the consortium running the field. China National Petroleum Corp. owns 37%, and Iraq's State Oil Marketing Organization owns the rest.

Representatives at Iraq's ministry of oil weren't immediately available for comment.

Sarah Kent contributed to this article.

Write to Justin Scheck at justin.scheck@wsj.com

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