Iraq's cabinet approved a draft oil and gas law on Sunday in a bid to finally pass rules regulating the country's most lucrative sector after years of political deadlock.

The law would govern the sector and divide responsibility between Baghdad and Iraq's provinces but despite the lack of such guidelines, foreign investors have still poured in, signing 11 contracts to potentially boost the country's oil output five-fold.

The cabinet "approved the draft oil and gas law and transferred it to parliament," government spokesman Ali al-Dabbagh said in a statement, adding the draft law "voids all previous draft laws" on the issue.

The oil and gas, or hydrocarbons, law has been repeatedly delayed since it was first submitted to parliament in 2007. It has been held up due to disagreements between MPs from the country's many different communities.

Despite the lack of such a law, foreign firms have signed multiple deals to develop Iraq's oil fields.

Iraq currently produces around 2.7 million barrels of oil per day (bpd), and domestic authorities are targeting a capacity of 12 million bpd by 2017, although the IMF has voiced doubts over whether that target is obtainable.

Oil accounts for the lion's share of government income, with Iraq exporting around 2.2 million bpd.

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