By OGJ editors
HOUSTON, Oct. 9 -- Heritage Oil Corp. said it has signed a production-sharing contract with the Kurdistan regional government (KRG) for an exploration license covering the Miran block in the southwest section of the Kurdistan region of Iraq. Heritage will begin geological work immediately and could start a high-impact exploration drilling program in 2008.
The 1,015 sq km license area contains the very large Miran structure, which as expressed at surface, comprises an area of about 500 sq km and may have three separate culminations.
Recent drilling indicates that the block's reservoir potential, which exists at numerous zones, could exceed 1 billion bbl of oil, Heritage said.
Under terms of the PSC, Heritage Energy Middle East Ltd. will serve as operator of the license, which has a primary term of 5 years and an option to extend for 2 additional years.
Heritage will invest just under $40 million over the primary term. The Miran license automatically will be converted into a development license upon a commercial discovery.
Heritage also has entered into a strategic agreement with the KRG to form a 50:50 joint venture company to build, own, and operate a 20,000 b/d refinery near the license area. The refinery is scheduled to be operational in about 2 years.
