Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline after a Paris arbitration court on March 23 ruled in favor of Baghdad, saying Ankara had breached a 1973 pipeline agreement when it allowed the Kurdistan Region to begin independent oil exports in 2014. Despite several talks between the Kurdish, Iraqi and Turkish officials, the oil export has not resumed. As a result, many oil companies suspended production.
The Norwegian company said in a statement on Thursday that it had restarted production in its flagship Tawke field after a four-month shut-in due to the ban on the Kurdish oil export.
“Production was restarted last month to conduct well integrity tests and synchronize reservoir models but has continued in response to strong demand for Tawke oil. Field output is currently averaging 40,000 barrels of oil per day (bopd). The nearby Peshkabir field, on the same license, remains closed,” said the DNO.
“One-half of Tawke production is delivered to the Kurdistan Regional Government and the balance is sold by DNO on behalf of the contractors (DNO 75 percent and Genel Energy International Limited 25 percent) to local trading companies and the oil transported by road tanker. Prices vary by contract and average around 50 percent of pre-closure levels but payments now are made promptly and directly to DNO,” it added.
DNO produced an average of 107.637 barrels per day in 2022 in Tawke and Peshkabir oilfields, which amounts to nearly a quarter of the Kurdistan Region’s total exports. In the first quarter of 2023, it produced an average of 94,720 barrels per day, according to its figures.
“While there is no light at the end of the export pipeline, we are seeing the headlights of more and more incoming tanker trucks loading up our Tawke cargoes on a cash-and-carry basis,” DNO Executive Chairman Bijan Mossavar-Rahmani was cited in the statement as saying. “Meanwhile, our strategy of broadening DNO’s portfolio beyond Kurdistan is bearing beautiful fruit,” he added.
