SULAIMANI (ESTA) — Norwegian oil firm DNO on Thursday scrapped its guidance for output in Iraq’s Kurdistan region following a halt in exports since March that forced the company to shut production.
Turkey stopped pumping about 450,000 barrels per day (bpd) of Iraqi crude from a pipeline from the Fish-Khabur border area to its Ceyhan port on March 25 after Iraq won an arbitration case at the Paris-based International Chamber of Commerce (ICC).
Four days later, DNO announced a shutdown of oil production from its Tawke and Peshkabir fields, which produced 107,000 bpd gross in 2022.
“Until export restarts and regularity of payment for past and ongoing oil sales is established, DNO cannot provide any projection of full-year Kurdistan production,” the company said in a first quarter results statement on Thursday.
Its Oslo-listed shares opened 3.9% down early on Thursday. They were 1.4% lower by 1225 GMT.
DNO told a call with analysts that the company would be ready to restart and ramp-up production on a short notice, when exports resume.
“We are positioning ourselves to hit the ground running when the opportunity finally arises. That could be (in) a week or two,” DNO’s executive chairman Bijan Mossavar-Rahmani told a call with analysts.
“There are a number of considerations (in restarting the pipeline), and one of the important is presidential elections in Turkey on May 14 with a possible run off,” he added.
Baghdad and the Kurdistan Regional Government (KRG) signed a temporary agreement on April 4 to restart oil exports to Turkey, but the two still need to iron out several aspects of the deal, and Turkey also has to agree to resume the flows.
DNO’s production in Kurdistan accounted for almost 80% of the company’s total net oil and gas output in the first quarter of 2023, which stood at 89,400 barrels of oil equivalent (boed). The rest came from the North Sea and West Africa.
DNO holds a 75% stake in the Tawke licence, which also includes Peshkabir field, while its partner Genel Energy (GENL.L) has 25%. Genel also suspended its 2023 production guidance on Thursday.
($1 = 10.4882 Norwegian crowns)
(Esta Media Network/Reuters)
