At least 15 companies were prequalified in mid-November to bid by 31 January for the contract, which calls for the drilling of two vertical and eight horizontal wells, as well as two water injection wells and up to six workover and recompletion jobs. The drilling job is part of a four-year buy-back contract awarded to the Sheer/Naftgaran team in March to increase production levels at the Masjid-e Soleiman field to 25,000 barrels a day (b/d) of oil from about 5,000 b/d. The field is located in Khuzestan province.

The Sheer/Naftgaran team is also processing a comprehensive reservoir study, which will determine well locations and potential workover/recompletion wells. The study is planned to be completed by the end of April. Project-related works under way include the building of Sheer's office and guesthouse in Masjid-e- Soleiman. Tenders for the construction of roads and the final design of production facilities are expected in 2003.

Sheer has a 49 per cent stake in the $88 million project, with Naftgaran holding the remainder. Calgary-based ECL Groupis acting as the consultant on the project.