The Norwegian oil and gas company DNO ASA said today that the average daily output from December to date has approached 90,000 barrels of oil (bopd), indicating a continued increase in gross production from its Tawke license, which is operated in the Kurdistan area of Iraq.
As a result of the Iraq-Türkiye Pipeline closing in March 2023, the estimated fourth quarter 2023 number is now 65,000 bopd, up from 26,000 bopd in the third quarter and nil output in the second.
The Company’s existing entitlement share, which is supplied to local purchasers at rates in the low to mid-USD 30s per barrel, represents close to 40% of the entire Tawke license output. To remove any possibility of arrears accumulation, all such sales are subject to an advance payment to DNO in US dollars.
Apart from increasing local sales, DNO has significantly decreased expenditures since the pipeline closure. The average operational spend in the Tawke license is around 65% less than it was prior to the export suspension. The Peshkabir field, in production since 2017, and the historic Tawke field, in production since 2007, are both owned under the Tawke license. After their discoveries, both fields were developed and put into production in less than two years.
“DNO is a resilient company, and these are resilient fields,” stated Bijan Mossavar-Rahmani, Executive Chairman of DNO. “Even with local sales prices as low as half of those realized from export sales through Türkiye, strong production generates material free cash flow for DNO,” he stated.
“We remain confident that the latest challenges facing DNO and the other international oil companies will be resolved once again and we remain committed to growing our business in Kurdistan as we have over the past two decades,” said Mossavar-Rahmani. “And that is notwithstanding a pivot to Norway where we have been reporting exploration discovery after discovery over the past two to three years.”
In response to a 2019 finding, DNO intends to drill another well in the Baeshiqa license in Kurdistan in 2024.
In the Tawke license, DNO is the operator and holds a 75% share; the remaining 25% is held by partner Genel Energy International Limited. With partners Turkish Energy Company Limited owning a 16 percent stake (20 percent paying interest) and the Kurdistan Regional Government holding a 20 percent carrying interest, DNO controls a 64 percent operated interest (80 percent paying interest) in the Baeshiqa license.
