Both countries have also awarded exploration contracts to oil companies for the area.

Coun Davies added that the exploration contracts would be awarded in the New Year.

In 1975, when Brazil briefly allowed foreign exploration contracts, Petrobras geologists allocated some of the least promising areas to the foreigners.

The exploration contract was along those lines, generous in absolute terms, but no share at all in the fields discovered.

It has entered a number of exploration contracts with foreign companies in recent months.

But many exploration contracts were signed by foreign companies before oil prices slumped and apply to areas where costs are high and results have been disappointing.

It attracted only 24 bids for 72 blocks on offer at the conclusion of its fourth round of international bidding for exploration contracts.

China announces exploration contract with Kabul - the first such international agreement in decades.

In all, 20 exploration contracts have been signed this year, continuing a trend from 2003, when 21 companies signed contracts.

In 1999, before the new contracts came into effect, only one exploration contract was signed.