UPDATE 1-BP to invest $2.85 bln in Iraq's largest oilfield

* Rumaila output to hit 1.450 mln bpd end-2013

* BP to drill 300 oil wells over next 5 years

By Aref Mohammed

BASRA, Iraq, May 22 (Reuters) - Oil major BP hasallocated $2.85 billion to develop Iraq's Rumaila oilfield in2013, up from $2.2 billion last year, the head of the jointmanagement committee for the field told Reuters On Wednesday.

Boosting output from Rumaila, Iraq's most prolific oilfieldis vital for the country to realise its ambition of raising oilexports to 6 million barrels per day (bpd) by 2017.

Salah Mohammad said production from the field would rise to1.450 million bpd by the end of 2013 from around 1.4 million bpdnow.

"The approved budget for Rumaila development plan in 2013will be $2.850 billion," he said.

In 2012, the approved budget for the development of Rumailawas $2.2 billion, of which around $1.9 billion was expended,Mohammed said.

Under the 2013 development plan for Rumaila, BP plans toissue three tenders for the drilling of 150 new oil wells in thesecond half of this year with each tender covering 50 wells.

"We have plans to drill new 300 oil wells in Rumaila overthe next five years," Mohammad said.

BP has also invited engineering companies to build a300,000-bpd production facility and more than 20 firms arecompeting for the project. A decision is expected in early 2014.

Rumaila, which BP operates with China's CNPC, has estimatedreserves of around 17 billion barrels and produces the bulk ofIraq's total output of more than 3 million bpd now.

The country has the world's fourth-largest oil reserves.