UPDATE 1-Nicaragua signs oil deal with MKJ Xploration unit

(Adds detail on royalties, paragraph six)

MANAGUA, April 8 (Reuters) - Nicaragua signed a contract with a unit of U.S. oil company MKJ Xploration on Tuesday to let it explore and develop oil and natural gas fields off the country's Caribbean coast, the company said.

The deal, signed by Nicaraguan President Daniel Ortega, kicks off the first serious exploration for oil in Nicaraguan waters, MKJ Xploration head Eric Conrad told a news conference in the Nicaraguan capital.

The company will search for oil over six years in two areas about 60 miles (100 km) off Nicaragua's east coast, Conrad said. If the company finds any, it will have the rights to produce oil and natural gas there over 30 years, he said.

Nicaragua had tried to close the oil deal during the administration of Ortega's predecessor Enrique Bolanos, but a court voided an agreement in 2006 after two regional councils challenged it on grounds they had not been consulted by federal authorities.

The regional councils authorized the plan in December.

Conrad said wells would be drilled in waters as deep as 3,300 feet (1000 meters). He said the company would pay 15 percent royalties on oil drilled and 30 percent of net profits earned in the country.

Like most of Central America, Nicaragua is dependent on costly fuel imports and would benefit enormously from the discovery of domestic oil fields. (Reporting by Ivan Castro; Writing by Jason Lange; editing by Carol Bishopric)