Norway's Norsk Hydro, which recently received the go-ahead to develop the highly promising Anaran block in Iran, has formally signed up for another promising block nearby called Khorramabad, writes Vahe Petrossian.
The $50 million contract follows Hydro's selection earlier this year, about two years after the National Iranian Oil Company (NIOC) launched a licensing round for Khorramabad and 15 other mainly onshore blocks.
Hydro said it expects to start a 600-kilometre, 2D seismic survey of the 7424-square-kilometre Khorramabad block in Lorestan province, near its existing Anaran concession.
Three exploration wells will be drilled during the four-year contract period.
Under the modified buy-back investment terms of 2004, Hydro is entitled to move to a 100% stake in the development phase and recoup its investment and profit over 25 years.
Khorramabad is considered the most promising of the 16 blocks tendered by NIOC, andHydro won the race against competition from half a dozen rivals. Little or no exploration has taken place in the block, but experts said the area is very promising.
The Khorramabad award follows the award of the Garmsar block in central Iran to Sinopec of China in June. That agreement will involve a minimum investment of $19 million.
Last year, Thailand's PTT Exploration&Production and China National Petroleum Corporation were awarded the Saveh and Kuhdasht blocks, respectively.
The Raz block, near the Turkmenistan border, awaits an award decision by NIOC, which last year selected Austria's OMV for the job.
A contract signing is unlikely until OMV settles its dispute over the Mehr block where oil was discovered last year but where the two sides have yet to agree a development strategy.
© Upstream 2006
