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BAGHDAD (Reuters) - Iraq signed final contracts with Angolan state oil company Sonangol on Tuesday to develop the Qayara and Najmah oilfields.

Qayara has reserves of some 800 million barrels and Najmah 900 million. Both are in the violent Nineveh province in Iraq's north, where Sunni Islamist insurgents like al Qaeda remain active almost seven years after the U.S. invasion.

The deals were awarded in Iraq's second bidding round for oil contracts, held last month in Baghdad.

The Sonangol deals are two of a series that Iraq has started to sign which could vault its oil output capacity to 12 million barrels per day in seven years, a level rivalling top producer Saudi Arabia, compared with 2.5 million bpd now.

That would give the country the billions of dollars it needs to rebuild after decades of war and sanctions, and help it to emerge from the violence triggered by the 2003 invasion.

Sonangol clinched the deals with an offer of a $6 a barrel remuneration fee and a plateau production target of 110,000 barrels per day (bpd) for Najmah, and a fee of $5 a barrel and output target of 120,000 bpd for Qayara.

The fees are among the highest paid to any of the oil firms that won one of the 20-year oilfield service contracts tendered last year, reflecting the risks and relatively low quality of oil at the two sites.

The firm had initially proposed a remuneration fee of $8.50 a barrel for Najmah and $12.50 for Qayara, but later agreed to the Oil Ministry's lower offer.