Iran, Norway finalise oil deal

Tehran, September 18 :

Iran and Norwegian firm Norsk Hydro have signed a deal for exploration of the major onshore oil block of Khoramabad in western Iran, state television and the company said on Monday.

The initial investment for the exploration amounts to $49.5 million and can be increased up to $107.5 million in case of additional costs, the television said.

The contract was signed in Tehran between the National Iranian Oil Companys exploration department and Hydro Zagros, the Iranian unit of Norwegian oil and gas firm Norsk Hydro. The contract is based on a joint package of exploration-development, under which the block will be awarded to the contractors if they find profitable hydrocarbon reserves.

However if the exploration does not end up recovering profitable oil, none of the costs would be paid back to the Norwegian side by Iran.

Norsk Hydro said in a statement that work is now at the planning stage and collection of the seismic data will start this year.

“If exploration proves to be successful, the period of the agreement will be 25 years,” it said The contract includes drilling three exploration wells, 2D seismic studies, re-testing previous seismic studies, geological studies and training staff.

Khoramabad is located in western Iran and covers an area of 7,425 square km.