Petrel Renews Agreements with Iraqi Government

Petrel Resources received Iraqi Ministry of Oil approval for the extension of the technical cooperation agreement with Petrel for another year. The company expects to meet shortly with the relevant Ministry officials to formalize arrangements. It is expected that Petrel will embark on a new oil & gas field study as part of this program.

Petrel, as contractor to the Ministry, is also driving forward the existing Subba & Luhais EPC (Engineering, Procurement & Supervision of Construction) project. Surveys have been conducted and major equipment delivered to site without security incidents. Petrel's experience proves that it is possible to work without insuperable difficulties in southern Iraq.

Petrel has also recently registered as a company interested in future Iraqi exploration and field development contracts. Petrel expects to be invited shortly to discuss Western Desert Block 6, which Petrel has studied since 2000. The company believes that negotiations are likely to be conducted under the existing hydrocarbon laws.

"We are very pleased to have begun the process which will see us move from managing technical studies and EPC projects to becoming a fully fledged exploration and production operation," David Horgan, managing director of Petrel commented. "Our long standing experience in Iraq will give us vital first mover and technical advantage over competitors. We remain entirely committed to our Southern Iraq development strategy and to working with the Iraqi Oil Ministry to help monetise the potentially vast resources available to risk aware investors."