BASRA, Iraq- Iraq has lifted oil production at Eni's Zubair field in the south by 50,000 barrels per day (bpd) to 475,000 bpd, an Iraqi oil official said on Wednesday.

Production rose after the completion of a new oil processing facility, Muhaned Abbas Kojer, the capacity expansion project director, told Reuters on the sidelines of a ceremony to launch the new installations in al-Zubair, south of Basra.

Zubair's production capacity will rise gradually to 625,000 bpd by the end of the year, as three additional processing facilities are added, and further expansions will take its capacity to its 850,000 bpd target by 2020, Abbas said.

The field should produce 140 million cubic feet per day of gas by the end of the year, he added.

Iraq, the second-largest crude oil producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia, has an oil production capacity of nearly 5 million bpd.

Crude output is kept at about 4.45 million bpd, in line with a deal between OPEC and some other non-OPEC producers to curb production in order to bolster crude prices.

The country is also seeking to lift its refining capacity to become self-sufficient in oil products.

The oil ministry has asked investors for bids by June 14 to build a 100,000 bpd refinery in Kut, south of Baghdad. 

Iraq's refining capacity was curbed when Islamic State overran its largest oil processing plant in Baiji, north of Baghdad, in 2014.

Iraqi forces recaptured Baiji in 2015 but it sustained heavy damage in the fighting. The country now relies on the Doura refinery in Baghdad and the Shuaiba plant in the Basra region.

(Additional reporting by Aref Mohammed; Writing by Maher Chmaytelli; Editing by Edmund Blair and Mark Potter) ((; +9647901917030;))