Shell is set to become the first Western energy company to return to Baghdad since the Iraq war started in 2003.

Shell oil tanker made idle by drivers' strike

Shell will own 49% of the venture

The Anglo Dutch giant has agreed a joint gas venture worth more than £2bn with the Iraq oil ministry.

It will capture unwanted gas burned off during oil production, for domestic consumption and export.

State-owned Southern Oil Co will own 51% of the venture and Shell 49%.

“Europe is looking for supplies of gas from Iraq,” an Iraqi oil spokesman said.

“Security used to be a deterrent, but now companies feel that security has improved and this will encourage others to come in.”

Energy broker Rob Laughlin was of the same opinion.

He told Sky News: “I think we’re going to see other people following Shell.

“Now that Iraq has become a safer place companies now feel more secure in operating out there.

“Pipeline ruptures seem to be a thing of the past as far as Iraq is concerned.”

Iraq has the world’s third-largest oil reserves and vast reserves of gas which are almost completely untapped.