Peter Howard Wertheim
OGJ correspondent
RIO DE JANEIRO, Aug. 9 -- Petróleo Brasileiro SA (Petrobras), Brazil's state-owned oil company, inked an initial $35 million oil exploration contract with state-owned National Iranian Oil Company (NIOC) of Iran, a Petrobras spokesperson told OGJ.
Petrobras International Director Nestor Cervero signed a service contract in Iran to start exploration operations on Tosan Block in the Persian Gulf. The block covers an area of about 3,200 sq miles.
Investments, which will be made over 3-4 years, will include seismic work and the drilling of two wells.
With this contract, Petrobras returns to the Middle East, where it operated in Egypt and Iraq during the 1970s. In Iraq, Petrobras invested $180 million and discovered Majnoon and Nahr Umr fields, which together had total reserves of 8 billion boe.
When Saddam Hussein took power in Iraq in 1978, Petrobras was forced to leave that country. Its investment was reimbursed with 11.5 million bbl of crude, which was shipped to Brazil.
Contract details
If Petrobras finds oil or gas on Tosan Block, NIOC will grant the company preference for rendering services for production and development as well as a certain percentage as established in the contract. Petrobras did no disclose the amount of this percentage, but said it would be calculated based on any discovery's size.
Petrobras won a license to explore for oil in 2003 on one of eight giant offshore blocks that were offered by Iran in its first offshore licensing round. More than 23 companies showed interest in bidding on the 16 exploratory blocks offered by Iran for international tender, the Petrobras spokesperson noted.
