Areas such as Abu Shagara, Al Qasimiya, King Faisal Road, Al Mahatta, and Majaz have been particularly affected
"Today the Iraqi oil ministry celebrates a return to work by Iraqi oil exploration teams after 20 years of interruption," ministry spokesman Assim Jihad told AFP.
Oil Minister Hussein Hussein al-Shahristani was to attend a ceremony to mark the event at the Al-Garraf field near Nasiriyah, 350 kilometres (220 miles) south of Baghdad, Jihad said.
He said the ministry would deploy three exploration teams trained abroad in the latest techniques.
OPEC member Iraq hopes the squads will uncover deposits that will enable it to double its proven oil reserves, currently standing at 115 billion barrels of crude.
After the regime of now executed dictator Saddam Hussein invaded Kuwait in August 1990, the United Nations imposed a strict oil embargo on Iraq, forcing it to cease exploration and cut back drastically on exports.
A UN "oil-for-food" programme between 1996 and 2003 allowed Baghdad to sell oil in exchange for humanitarian goods it lacked because of the sanctions.
However Saddam's government allegedly embezzled millions of dollars from the scheme, sparking a scandal that caused major embarrassment to the United Nations.
Iraq now wants to ramp up output by 500,000 barrels per day (bpd) from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion of March 2003.
Exports of 2.11 million bpd currently form the bulk of the war-torn nation's revenues, and the oil ministry is keen to raise capacity over the next five years to 4.5 million bpd.
On Tuesday, a US government report said Iraq was amassing a huge budget surplus of soaring oil export revenues but spending little on reconstruction, leaving the financial burden on the United States.
Counting Baghdad's actual budget balance for 2005 to 2007, and the projected budget of 2008, Iraq would have amassed a surplus of up to 79.3 billion dollars on the back of high prices, the Government Accounting Office said.
But little of that money is going toward maintaining and rebuilding key civil infrastructure, it said.
The report said Iraq's capital spending has been hampered by the lack of trained personnel, weak budgeting and procurement processes, and ongoing violence across the country.
At the end of June, the oil ministry threw open six oilfields and two gas fields for international bidding by 41 companies, the contracts for which are expected to be signed in June next year.
The deals, which are service contracts only, pave the way for energy firms based abroad to return to Iraq 36 years after Saddam threw them out.
Areas such as Abu Shagara, Al Qasimiya, King Faisal Road, Al Mahatta, and Majaz have been particularly affected
The Ministry of Foreign Affairs reiterated its call on the United Nations and the UN Security Council to fulfill their responsibilities
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