DNO’s oil production in the semi-autonomous Kurdistan region of Iraq has “largerly recovered” from the key export pipeline shutdown almost a year ago, but is now sold locally at a discount, the Norwegian company said.
Crude oil flows of around 450,000 barrels per day from northern Iraq to Turkey were halted last March following an International Chamber of Commerce arbitration ruling. It remains unclear when the exports could restart. “At year-end, gross production from the DNO-operated Tawke license had largely recovered from the March 2023 export pipeline shutdown and was averaging 80,000 barrels of oil equivalent per day,” the company said in statement. DNO produced around 95,000 boepd from the Tawke and Peshkabir fields in the Tawke licence before the pipeline’s shutown. It was down to some 35,000 boed in the third-quarter of 2023. The company has managed to increase production by selling more oil to the local market, with oil transported to customers by road tankers.
DNO said it was selling oil at prices in the low-to-mid $30s per barrels, but with operational spending also down due to a halt in drilling, the sales generates some $10 million per month in free cash to the company.
“Surely no one is pleased to leave significant money on the table with every barrel sold,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.
DNO said it expected gross production at the Tawke license to continue to average 80,000 boed.
The company holds a 75% stake the Tawke license, while its partner Genel Energy has the remaining 25% stake.—Zawya
