China's CNOOC signs contract for oil development in Iraq's Block 7

CNOOC Ltd, a Chinese company, announced Wednesday that it had signed an Exploration, Development & Production Contract with Iraq's State-run Midland Oil Company for the exploration of oil and gas in the Block 7 Field.

CNOOC Africa Holding Ltd, the state oil and gas company's fully owned unit, will hold 100% interests and act as the operator for the 6,300-square-kilometer Block 7, located in central Iraq's Diwaniyah province.

CNOOC won the bid to explore the block as part of Iraq's licensing round, which was a recent policy shift in which Baghdad began offering profit sharing with partners, instead of technical service contracts.

CNOOC did not specify when the exploration phase would begin, but said that the contract stipulates that the first stage will last for three years.

CNOOC, one of the largest international oil companies in Iraq, focuses its activities on Maysan Field in Southeast Iraq.

CNOOC's top executive stated in August that Block 7 may lead to a major discovery. The company also maintains strict standards when selecting new investment targets outside China. (Reporting and editing by Nicholas Yong; Chen Aizhu)

(source: Reuters)