UPDATE 1-CNPC starts to get paid for developing Iraq oilfield

* CNPC receives 1st crude for Rumaila service deal

* The oil will be sent to Chinese refineries (Adds background)

BEIJING May 30 (Reuters) - China National Petroleum Corp (CNPC) has received its first cargo of crude oil as payment for helping to develop Iraq's Rumaila oilfield, the top Chinese oil firm said on Monday, two weeks after partner BP Plc loaded its first shipment.

CNPC, parent of PetroChina , sent off a very large crude oil carrier carrying 2 million barrels of oil from the Basra Oil Terminal in southern Iraq on Saturday, its company newspaper, the China Petroleum Daily, reported.

The VLCC was sailing back to China and the cargo will be used by domestic refineries, the newspaper report said.

A consortium consisting of CNPC, BP and an Iraq firm was awarded the service contract in 2009 to develop the Rumaila field, which pumps almost half of Iraq's output, as part of the OPEC member's ambitious plans to expand its oil industry.

BP and CNPC were owed more than $1 billion for work at Rumaila over the past year or so, where production increased by 10 percent last year as required in the contract, making the foreign oil firms eligible to be paid to recover costs.

BP holds 38 percent, CNPC has 37 percent and Iraq holds 25 percent stakes, respectively, in the 20-year service contract for Rumaila oilfield. (Reporting by Jim Bai and Tom Miles; Editing by Jonathan Hopfner and Ken Wills)