Seeking to expand the country's hydrocarbons reserves, state-owned Qatar Petroleum (QP) signed an exploration and production-sharing agreement (EPSA) with JX Nippon Oil & Gas Exploration of Japan on May 8th,giving the latter the right to explore for oil and natural gas in Qatari waters. The offshore area, Block A, falls in the pre-Khuff reservoir formation beneath the North Field, which holds the largest single concentration of natural gas in the world, and covers 6,173 sq km. The agreement is the third that will allow exploration of the formation-QP previously signed similar deals with the China National Offshore Oil Exploration Company (CNOOC) for Block B/C and with Royal Dutch Shell (Netherlands/UK) and PetroChina for Block D. The EPSA is for 30 years, staring with a five-year exploration period followed by a 25-year development and production phase. During the exploration phase, the Japanese firm will invest US$100m to implement a work programme, including technical studies, 2D and 3D seismic surveys and drilling a number of wells. If oil or gas is found in commercial quantities, the Japanese company will start production. Both the Qatari oil minister, Mohamed bin Saleh al-Sada, and JX Nippon Oil & Gas Exploration's president and chief executive, Makoto Koseki, told reporters after signing the deal that there was a great possibility of finding natural gas in commercial quantities in Block A as it fell beneath the North Field. Qatar's total oil exploration area is divided into 22 hydrocarbons blocks covering a total surface area of 43,426 sq km. Since the early 1990s, QP has entered into a number of EPSAs and development and production-sharing agreements (DPSAs) with foreign companies to develop its production potential. Under an EPSA, the foreign partner is granted the right to explore for oil and/or gas in the relevant block and, if any is discovered, to develop the fields. Under a DPSA, the partner is required to cover appraisal and development of already discovered structures or further development of existing fields. According to UK-based BP's Statistical Review of World Energy, Qatar's proven oil reserves are 25.3bn barrels, and its gas reserves 910trn cu ft, the third largest in the world.