JAPEX TO EXPLORE STRAIT OF HORMUZ OFF IRAN

Japan Petroleum Exploration Co. has agreed to an exploration and development campaign in Iran's portion of the Strait of Hormuz. Under a letter of intent with National Iranian Oil Co., Japex agreed to spend $100 million for exploration to begin in summer 1992, with total outlays reaching as much $1.6 billion in the event of development. Japex's plan calls for 2,500 miles of seismic surveys and six wildcats. A final agreement is expected next spring.

Sept. 23, 1991

Japan Petroleum Exploration Co. has agreed to an exploration and development campaign in Iran's portion of the Strait of Hormuz.

Under a letter of intent with National Iranian Oil Co., Japex agreed to spend $100 million for exploration to begin in summer 1992, with total outlays reaching as much $1.6 billion in the event of development. Japex's plan calls for 2,500 miles of seismic surveys and six wildcats.

A final agreement is expected next spring.

Acreage covered by the deal includes two drilled structures and three prospects. The biggest of the identified structures is Henjam. It extends into Omani waters, where it is known as West Bukha (see map, OGJ, July 1, p. 28).

Japanese sources say Japex has, in principle, established it will earn a return on exploration and development with payment to be made in crude or condensate. NIOC insists Japex surrender operatorship of any commercial project when E&D phases are complete.