SINGAPORE: China’s CNOOC Ltd announced on Wednesday it has signed an Exploration, Development & Production Contract (EDPC) with Iraq’s state-run Midland Oil Company to explore for oil and gas at the Block 7 field in the Middle East nation.

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.

The deal formalises a winning bid by CNOOC to explore the block, part of Iraq’s recent licensing round under which Baghdad offered profit-sharing with partners instead of the previous technical service contracts, in a landmark policy shift.

Under the contract, the first stage of the exploration period will last three years, CNOOC said, without specifying when it will commence.

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CNOOC is one of the main international companies producing oil in Iraq, with activities focused on Maysan field in southeast Iraq.

A top CNOOC executive said in August that Block 7 could lead to a large discovery and the company maintains high standards in picking new investment targets outside China.