China’s CNOOC has signed an Exploration, Development & Production Contract (EDPC) with Iraq’s state-run Midland Oil Company to explore for oil and gas at the Block 7 field.

CNOOC Africa Holding Limited, will hold 100% interests and act as the operator for the 6,300-square-kilometer Block 7, located in central Iraq’s Diwaniyah province.

The deal was part of Iraq’s recent licensing round under which Baghdad offered profit-sharing with partners instead of the previous technical service contracts, in a landmark policy shift.

The first stage of the exploration period will last three years, CNOOC said.

CNOOC is one of the main international companies producing oil in Iraq, with activities focused on Maysan field in southeast Iraq.