Hess, Petroceltic to explore Kurdistan blocks in Iraq

By OGJ editors
HOUSTON, July 27
-- A partnership of Hess Corp. and Petroceltic International PLC signed production sharing contracts with the Kurdistan Regional Government for the Dinarta and Shakrok exploration blocks northeast of Erbil, Iraq.

Each PSC has an initial 3-year exploration period in which the joint venture plans to shoot 2D seismic and drill at least one exploratory well. Hess is operator and has 64% participating interest and 80% paying interest. Petroceltic has 16% participating interest and 20% paying interest, and the KRG has a 20% carried interest in each block.

Dinarta is a highly prospective undrilled block in a proven but largely unexplored area. The 1,319 sq km block lies along trend from the Shaikan, Atrush, and Swara Tika oil discoveries.

Dinarta has a number of identified surface structures, the largest of which, the Chinara anticline, is 25 km along strike from the Swara Tika-1 well, reported to be testing a significant new discovery. The other structures also have large potential surface closure areas with multiple reservoir targets believed likely to be present in Jurassic and Triassic.

Shakrok is an undrilled block in a proven but largely unexplored area. It covers 418 sq km along trend from Taq Taq oil field and the Bina Bawi oil discovery. The block itself contains large surface anticlines with multiple reservoir Jurassic and Triassic targets likely to be present.

Petroceltic said its total financial commitment during the first license period is expected to be $72 million, the majority of which will be incurred in the next 6 months. The amount includes all signature and capacity building bonuses payable to the KRG under the terms of the PSCs.

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