China’s Dragon Oil has bought a stake in a Tunisian offshore exploration block.

Under the agreement, Dragon Oil will pay 75 per cent of drilling costs, which could amount to $26.6m. In exchange, the company gets a 55 per cent stake in a new joint venture company with two Australian companies Cooper Energy and Jacka Resources. The Tunisian government has yet to approve the farming-out of the 4,616 square kilometres exploration block. If the joint venture strikes oil, Dragon will take over production.