A consortium led by Lukoil Holdings has initialled a contract with Iraqs Ministry of Oil for exploration, development and production rights over Block 10, which is located 120km west of Basra in Di-Kar and Mutannah provinces
Lukoil Overseas will hold a 60 per cent share of the field, with Japan’s Inpex holding the remaining 40 per cent stake. Iraq’s South Oil Company will hold of the contract on behalf of the Iraqi government.
Andrey Kuzyaev, president of Lukoil Overseas, noted that the distance between Block 10 and West Qurna-2 megaproject operated by Lukoil Overseas was no more than 100km.
"The two projects will obviously benefit from the synergy in terms of infrastructure, equipment and manpower mobilisation," Kuzyaev remarked.
According to the terms of the contract, the exploration programme will cover a five-year period, plus the option to extend its length by a further two years. The contract will also includes 2D seismic acquisition of a 1,375km line and the drilling of an exploration well. A two-year appraisal programme will also be implemented.
If commercial reserves are confirmed then the oil production period will last 20 years, which will be extendable by five more years.
According to Lukoil, a remuneration fee of US$5.99 per barrel has been agreed, which would be paid for the produced oil. These payments will start as soon as the production level reaches 25 per cent of the target plateau rate, which will be determined upon completion of the exploration and appraisal activities.
