Repsol will pay a total fixed cost of $27 million over two-and-a-half years, said Mahmoud Mohaddess, director of NIOC's exploration office. If necessary, the parties can extend the contract for a year at a cost of a further $11.2 million, he added.
"The total of the fixed and probable cost of the contract will be $39.2 million, which will have to be paid by Repsol," he said.
Mohaddess described Repsol's service contract as an "exploration risk" contract, under which the NIOC won't pay for any of the costs incurred in the course of the exploration if the contractor fails to come up with a commercially viable field.
If the field is viable, NIOC will pay for the exploration costs and retender the field for development. Repsol would then enjoy some priority in this "partial tender".
The contract with Repsol is the seventh exploration block contract signed with international and domestic oil companies to determine probable in-place and recoverable oil as well as natural gas, he said.
The blocs, 14,600 square kilometers in size, are located in the Persian Gulf south of Kish island.
The NIOC put on international tender the exploration and development of 16 newly-defined onshore and offshore oil blocks during a two-day conference in the Dutch city of The Hague in January.
The first offshore exploration contract was signed with Brazil's state-owned oil company Petrobras in June.
The service contract, at an initial cost of $35 million, covered exploration of the Tosan block in the Persian Gulf.
The 16 blocks are part of a total of 51 new exploratory oil blocks in different parts of the country that will go on for international tender in phases.
The winners of the five other awarded blocks haven't been revealed.
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