LONDON - DNO International ASA, a Norwegian oil and gas company, has stepped up exports of crude from Kurdistan’s Tawke field in recent days and an average 100,000 barrels per day (bpd) are reaching storage facilities at Ceyhan in Turkey, the company reported.
DNO, an early entrant into the KRG oil sector, produces 120,000 bpd from the Tawke field, with the balance sold below market prices to the local market in Kurdistan.
The outgoing crude is mounting up unsold at Ceyhan, pending resolution of the continuing dispute between Erbil and Baghdad over control of the region’s hydrocarbons. The step-up in deliveries began on April 26.
The impasse meant the company’s third quarter net profit of $24 million came in below analysts’ estimates.
Company chairman Bijan Mossavar-Rahmani, reporting the quarterly results in Oslo this week, highlighted DNO’s position as the fastest growing producer in the KRG with the largest proved and probable reserves of oil and gas.
He noted that the Tawke field was the largest onshore oil discovery in the world in the past 10 years.
"We have our foot firmly on the accelerator in Kurdistan where we are now the fastest growing producer and also number one in proven and probable oil and gas reserves," Mossavar-Rahmani said.
He said that during the first quarter DNO had brought two more high deliverability horizontal wells into production as part of a program to have nine such wells completed by the end of 2014. Capacity was expected to reach 200,000 bpd by year-end.
Elsewhere in Kurdistan, the company has started selling oil from the Benenan field and the first gas from the Summail field.
In an interview with Bloomberg News, Mossavar-Rahmani said he believed the company was moving closer to selling the oil held at Ceyhan.
“We’re closer than ever,” Bloomberg quoted him as saying. “The last remaining piece of this is the access to international markets in terms of both security of movement and in terms of payments. And we’re getting there.”
Storage facilities at Ceyhan are rapidly approaching capacity and the DNO chairman said that situation would force a solution. “Either this will trigger an unlocking of this impasse with respect to Kurdistan exports, or it’ll cause us to try to continue to focus on the local market,” he told Bloomberg.
Turkish Energy Minister Taner Yildiz confirmed this week that the flow of oil from the KRG to Turkey had resumed, adding: "Turkey only facilitates the procedure and paves the way. The sales may begin within three days or a week."
A senior advisor at Kurdistan’s Ministry of Natural Resources (MNR) meanwhile said: “We ask buyers to participate in tenders to sell Kurdistan oil.”
