In a little-noticed but highly symbolic deal that has the potential to move the oil industry in Iraq’s long-suffering Kurdistan out of the Soviet era, Heritage Oil Corporation has announced a joint venture that will result in an estimated 50,000 new barrels of oil per day being pumped from the region.

Heritage, a tiny Canadian oil exploration and production company, whose chairman’s family helped launch the Iraqi oil industry nearly a century ago, will partner with Eagle Group, a Kurdish company.

Heritage managed to secure a contract as its giant international competitors – especially Russia’s Lukoil and France’s Total – scramble to replace lucrative contracts handed out by Saddam Hussein in the days before the American-led invasion. Energy industry analysts have estimated that the value of the contracts voided by the Iraqi interim government was $38 billion.

Heritage was awarded the right to exploit some prime real estate. The oil fields of Iraqi Kurdistan – whose main production terminal is Kirkuk – are the second largest in Iraq, containing 8.7 billion barrels of proven reserves, according to the Department of Energy. However, there may be some questions as to the quality of the reserves there as a result of Hussein-era production practices, according to the Energy Information Administration’s November Iraq analysis.

Iraq has 115 billion barrels in proven reserves, behind Saudi Arabia and Canada, according to the DOE. The Iraqi Oil Ministry disagrees with this number, and in August, the Iraqi oil minister, Thamer Gadbhan, claimed there are 214 billion barrels of “unconfirmed or potential reserves” in the country.

Heritage’s chairman and CEO, Micael Gulbenkian, is descended from the family that formed the syndicate to pump the first wells in Iraq in 1911.The syndicate later became the Iraq Petroleum Company, which held the oil-drilling rights for Iraq, Saudi Arabia, and what is now the United Arab Emirates.

After World War I, the companies that the IPC partnered with to distribute the oil it pumped in Europe and America became household names: British Petroleum, Mobil, Royal Dutch/Shell, and France’s Total. The IPC and all its assets were nationalized by Iraq in 1972.

Mr. Gulbenkian, in a statement announcing the deal, did not pretend that the contract was awarded purely on Heritage’s merits. He said, “As a result of my family’s historical connections in the area, this joint venture could have the ability to transform Heritage Oil.” He did not return a call for comment. The company, brought public four years ago, earned $2.6 million last year on $4.5 million in sales.

The contract is likely to be profitable for Toronto-based Heritage, but with limited potential, said Energy Intelligence analyst John van Schaik.

“Awarding an open-ended exploration contract is something the Kurds simply cannot do right now,” he said.

The deal is best viewed as a technical services contract to expand the production of what’s already being pumped or has already been discovered, he said.

He added that the economic relationship between Baghdad and Kirkuk – with oil-rights questions being the primary concern – is one of the most sensitive issues being dealt with today in Iraq.