The firm says the 2 billion barrel reservoir figure has been estimated by its technical staff following the analysis of 171 kilometres of seismic studies from an overall block area of 283 square kilometres.

The company expects to drill a discovery well for the block, near the city of Dihok, in early 2009 after recently agreeing a rig contract with the UK’s Weatherford Drilling International.

Preparation of the Shaikan drilling site has started while tenders for ancillary well site services are either being solicited or are under evaluation.