OIL Search Ltd has signed a seismic option agreement with Kurdistan regional government (KRG) over block K42 in Iraq.
Block K42 which covers 511sqkm, lies in the south-easternfairway of the Zagros Fold Belt of Kurdistan, adjacent to the Pulkhana discovery and the Kor Mor gas condensate field, which is currently under development.
The K42 block has not previously been drilled, but was thought to contain the highly-productive cretaceous and tertiary intervals present in the regionand therefore, has the potential to contain material reserves.
Under the agreement, Oil Search would acquire 200km of 2D seismic.
These seismic acquisition activities, which Oil Search would operate and fund 100%, are expected to start within the next six months.
Oil Search then has an option to sign a full production sharing contract (PSC) on agreed terms, should the results of the seismic data be encouraging and if other conditions precedent is met.
Should the Company elect to enter a PSC, its working interest will be 60%, paying approximately 75% of the minimum work programme costs (one well).
Oil Search’s managing director Peter Botten said: “This seismic option agreement in block K42 provides Oil Search with an opportunity to expand its presence in a highly prolific fairway.
“It is in line with Oil Search’s strategy to focus on licences that have material hydrocarbon potential, as block K42 has an excellent address in a world class hydrocarbon province.”
Mr Botten said several companies had announced large new discoveries in this highly-prospective region and oil exports had recently started from the Tawke and Taq Taq fields.
“The option allows the company to reduce subsurface risk prior to taking on drilling commitments,” he said.
“Knowledge gained from our past non-operated ventures in the region will be applied to Oil Search’s first-operated venture in Kurdistan.
Oil Search is extremely pleased to be operating in Kurdistan and is lookingforward to bringing both its PNG Fold Belt expertise and community affairs skills to the K42 venture,” Mr Botten said.