China's CNOOC Limited has announced that, the Company, via its wholly owned subsidiary - CNOOC International Limited, together with Turkish Petroleum Corporation (TPAO), have signed a technical service contract (TSC) for the development and production of the Missan Oil Fields within Iraq.
The Missan Oil Fields are located in the southeast of Iraq, about 350 kilometers southeast of Baghdad.
The TSC has a contract term of 20 years and the Company has undertaken to increase the daily production of the Missan Oil Fields to 450,000 barrels within six years.
The Company will earn US$ 2.3 per barrel on the incremental oil production once the daily production has been raised by 10% from its current level and will recover its expenditure through a cost recovery mechanism.
According to the TSC, the Company acts as the operator and holds 63.75% participating interest while TPAO holds 11.25%. Iraqi Drilling Company, a local Iraqi company, holds the remaining 25% in the project.
Mr. Fu Chengyu, Chairman and CEO of the Company welcomed the signing of the TSC and commented, "It is a great pleasure to participate in rebuilding Iraqi's oil industry together with TPAO. CNOOC Ltd and its partner will carry out an active investment plan on the development of the Missan Oil Fields, to increase the production level for the benefits of all parties."
TSC will be effective subject to a few pre-conditions including the approval from Iraq.