The contract comprises an exploration period and a development period.
The exploration period shall be at least of 5 years starting from the 6 November 2007. Such a term shall be subdivided in: an initial sub-period of 3 years, and a second sub-period of 2 years. The right of Reliance Exploration & Production DMCC to accede to the next sub-period shall be subject to fulfillment of the minimum exploration obligations or minimum work obligations agreed in the contract. If no commercial discovery has been made at the end of the exploration period, the contract shall terminate.
The development period shall be 20 years from the declaration of a commercial discovery of oil or natural gas by Reliance Exploration & production.
The government shall have the option of participating through a public company in the contract, in respect of the entire contract area as a contractor, with an undivided interest in the petroleum operations and all the other rights duties obligations and liabilities of a contractor under the contract, of up to 25% and not less than 5%. The government shall be entitled to exercise the option of participation by notifying the Reliance Exploration & Production in writing.
The government may exercise this option at any time between the 6 November, 2007 and 180 days after the date on which Reliance Exploration & Production declares the first commercial discovery, by nominating lo the Reliance Exploration & Production, in writing, a public company.
Reliance Exploration & Production shall give preference to personnel from the Kurdistan Region and other parts of Iraq to the extent such personnel have the technical capability qualifications, competence and experience required to perform the work. It has to require its subcontractors to do the same.
Each contractors and its affiliates and subcontractors shall have the right to hire foreign personnel only if the personnel from the Kurdistan Region and other parts of Iraq do not have the requisite technical capability, qualifications or experience for positions to be filled.
For the first 5 years form the 6 November 2007, Reliance Exploration & Production shall provide up to
US $ 250,000 in advance each year to the government for the recruitment or secondment of personnel, whether from the Kurdistan Region other parts of Iraq or abroad, to the Ministry of Natural Resources The selection of such personnel shall be at the discretion of the Minister of Natural Resources.
Reliance Exploration & Production shall have the right to freely access and operate within the contract area, as well as any facilities associated with the petroleum operations, wherever they may be located.
Reliance Exploration & Production shall have the rights to freely use and access roads located within and outside the contract area for the construction, installation, maintenance, operation and removal of pipelines and other facilities required for the petroleum operations.
Reliance Exploration & Production shall start exploration operations within 30 days of Management Committee (2 members designated by the government, 2 members by the company, see Art. 8) approval of the exploration work program and budget. Reliance Exploration & Production shall, during the first sub-period:
- perform geological, geophysical studies (such as the (i) the compilation of a technical database; (ii) the performance of a remote sensing study, (iii) a field visit to verify initial geological and geophysical work and remote sensing results and plan for two dimensional seismic acquisition and carry out a data search for existing data specific to the contract area – well data, seismic data and gravity data-);
- perform field work comprising structural, stratigraphic and lithologic mapping and sampling;
- acquire, process and interpret 200 line km of two dimensional seismic data within the contract area, committing for this purpose a minimum financial amount of US $ 3,000,000;
- drill 1 exploration well up to a depth of 3000 m. or up to the lower cretaceous formation, committing for this purpose a minimum financial amount of US $ 7,500,000 Dollars.
During the second sub-period Reliance Exploration & Production shall:
- acquire, process and interpret further seismic data, if it considers that the results from the first exploration well justify the acquisition of further seismic data, committing fin this purpose a minimum financial amount of US $ 2,250,000;
- drill one exploration well up to a depth of 3,000 m or up to the main objective, which is earlier, committing for this purpose a minimum financial amount of US $ 6,000,000, unless the data from the first Exploration Well demonstrates that there is not a reasonable technical case for drilling the second exploration well.
Reliance Exploration & Production shall meet its minimum exploration obligations for the applicable sub-period, even if this entails exceeding the minimum financial commitment for such sub-period.