Iraq - Block 9

Oil discovery in two targets - the first significant success in Dragon Oil’s exploration portfolio

Iraq - Block 9

Block 9 is located in the Basra province, onshore Iraq, and covers an area of 866km2.

Kuwait Energy Corporation (KEC) is the operator for Block 9, participating with a 60% contractor share, while Dragon Oil has 30% and Egyptian General Petroleum Corporation (EGPC) has 10%.

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In May 2012, a consortium of companies including Dragon Oil was awarded an exploration, development and production contract (EDPSC) for Block 9 in Iraq’s fourth bidding round. Block 9 is located in the Basra province.

Dragon Oil jointly bid with Kuwait Energy in respect of Block 9.  The contract was initialled by the Iraqi Ministry of Oil and the consortium on 16 July 2012 and the final services contract was signed on 27 January 2013.

The consortium spudded the exporation well in March 2014. On 10 September 2014, we alongside our partner Kuwait Energy announced our first oil discovery at Block 9. The successful discovery was at the consortium's first target, the Mishrif formation at 2,700 meters, in its Block 9 exploration well, ‘Faihaa-1’, located in Northern Basra, Iraq.

Preliminary tests of the Faihaa-1 Mishrif formation resulted in a flow rate of circa 2,000 barrels of oil per day (bopd) and c. 3,400 bopd of 20 API oil on 32"/64" and 64"/64" chokes, respectively.

Later in the year, in December, the partners reported their second oil section discovery in the second target, the Yamama formation, reached at 4,000 meters in the same Faihaa-1 exploration well. Preliminary open hole tests of the Faihaa-1 Yamama formation resulted in oil flow rates of c. 5,000 and 8,000 bopd of 35 API crude oil on 32”/64” and 64”/64” chokes, respectively.

The report from an independent petroleum engineer incorporating the results of testing the Mishrif formation indicated contingent 2C oil resources of 198 million barrels and contingent 2C gas resources of 56 Bscf net to Dragon Oil on a working interest basis.

The consortium commenced oil production from Faihaa-1 well in 2015. Production began from the Faihaa-1 well in the order of 5,000 bopd on 32"/64" choke.

 

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