Russia’s Bashneft has signed an agreement with Iraq’s Oil Ministry to become the operator of exploration Block 12, following the country’s fourth licensing round at the end of May.

Bashneft bid for Blocks 10 and 12 as part of a consortium with Petrovietnam Exploration & Production and Premier Oil.

In negotiations following the auction, Bashneft agreed to the government’s proposed remuneration fee of $5 a barrel of oil equivalent for the development of Block 12. Premier Oil remains Bashneft’s partner in this project, according to a 28 June company statement.

The 8,000-square-kilometre exploration block is located in the Najaf and Muthanna provinces, approximately 130km west from the city of Nassiriya and part of the unexplored Western Desert.

Only three of the 12 oil and gas blocks auctioned in Iraq at the end of May were awarded amid muted interest from international oil companies.

Russia’s Lukoil and its Japanese partner Inpex won a deal to develop the 5,500-sq m Block 10 in the southern provinces of Muthanna and Dhi Qar. Kuwait Energy, Dublin-listed Dragon Oil and Turkish Petroleum Corporation (TPAO) also won a contract for Block 9 in Basra province. Finally, Karachi-based Pakistan Petroleum won the contract for gas Block 8 in the eastern Iraq provinces of Diyala and Wasit. The nine other blocks either received no bids or negotiations on terms broke down.