OREANDA-NEWS. August 7, 2012. The Iraqi Ministry of Oil and the Consortium comprised of Bashneft (70%) and Premier Oil (30%) initialled the contract for geological exploration, development, and production at Block 12 today in Baghdad. The contract was submitted for approval from the Council of Ministers of the Republic of Iraq.

The obligatory five-year geological exploration programme at Block 12 (which can be extended twice, for a two-year period each time) includes 2D seismic survey totaling 2,000 linear kilometers and drilling one exploration well. If commercial oil reserves are proved, the contract will be concluded for 20 years. The fee for produced oil will amount to USD  5 per barrel. The payments will start after achieving 25% level of the expected oil production plateau which will be determined after the end of geological exploration and evaluation of reserves and recorded in the development project approved by the Iraqi Ministry of Oil.

Block 12 is located in the Najaf and Muthanna provinces, approximately 80 km to the southwest from the city of Samawah and 130 km to the west from the city of Nasriya. It is a part of the Western Desert, which is an unexplored region having the greatest potential in Iraq in terms of oil production. The block’s approximate area is 8,000 sq. km.