Abstract: Block 3 in Iran is the first oil exploration and development project of CNPC at Buy-Back contract. An oil discovery was got through 6 years exploration and appraisal in the block, which was evaluated and concluded non-commercial at Buy-Back contract, so the project was abandoned. Some geological knowledge, exploration experience and failure reason were summarized in the paper. First, exploration in block 3 indicates the geological complexity of the Middle East. Seismic acquisition and image are difficult, and the distribution of effective reservoir is controlled by fracture distributing in low porosity limestone deposit in bathyal facies in the block. Both of these need special exploration techniques and methods. At the same time, it is realized that the reservoirs of low porosity limestone with fractures may be important exploration field in the future of the Middle-East. Second, the affection of items of Buy-Back contract to the project is analyzed. It indicates the definition of commercial field in the Buy-Back contract is the key factor, and inaccurate cost estimation is another factor to the failure of the project. At last, some experiences are summed up further in the operation and execution of the project