Dragon Oil inks final contract for Iraqi block 9
MOSCOW. Jan 28 (Interfax) - A consortium including Dragon Oil, the Iraqi authorities, and the country's tender committee have signed a final contract for prospecting and producing oil at block 9 in Iraq, Dragon Oil said.
"Dragon Oil bid jointly with Kuwait Energy in respect of Block 9. Kuwait Energy will be the operator in the service contract for Block 9, participating with a 70% contractor share, with Dragon Oil at 30%. Block 9 is located in the Basra province and covers an area of approx. 900km2. If Block 9 is found to be commercial during the five-year exploration period, during which time the consortium is eligible for a possible renewal for another two years twice, the consortium is automatically eligible for 20-year development and production phases, extendable by a further five years," the company said.
The consortium consists of Dragon Oil, Kuwait Entegy, and Turkey's TPAO. Initially, Kuwait Energy had been offered 40% in the project, the other two members 30% each.
The consortium won the block 9 tender in the fourth licensing round in Iraq held late in May of last year. Its was the only bid. The signing bonus was $25 million, and the cost of developing the block is put at some $90 million.
Block 9 is located in the province of Basra in southeastern Iraq. It covers 900 square kilometers.
Dragon Oil, which is incorporated in Ireland but headquartered in Dubai, is developing the Cheleken contract area in Turkmenistan's sector of the Caspian under a production sharing agreement signed with the Turkmen government in 1999. Cheleken includes two major fields: Dzheitune (formerly Lam) and Dzhygalybeg (formerly Zhdanov).