DNO ASA, the Norwegian oil and gas operator, announced that production from its flagship Tawke field in the Kurdistan region of Iraq continued uninterrupted during this week's shut down of the Kirkuk-Ceyhan pipeline in Turkey, given the flexibility to redirect volumes from exports to local sales.
Prior to the pipeline disruption, Tawke production in the third quarter to date averaged 157,000 barrels of oil per day (bopd), of which 134,000 bopd was transferred to the Kurdistan Regional Government for export at the latter's instruction and 20,000 bopd was sold into the local market by DNO. Another 3,500 bopd continues to be processed at the company's Tawke refinery.
In the second quarter of 2015, 118,000 bopd of Tawke production was transferred to the Kurdistan Regional Government at Fish Khabur for export, 31,000 bopd sold by DNO into the local market and 3,500 bopd processed at the Tawke refinery. Overall second quarter field output was up nearly 50 percent from the first quarter.
The company indicated that it is closely tracking regional security developments and will take measures to secure personnel and facilities as necessary.
Discussions are ongoing with Kurdistan's Ministry of Natural Resources regarding the split between export deliveries and local sales, payments for prior and ongoing exports and revenue allocation covering local sales which are paid for directly by the buyers. In the interim, in line with other operators, DNO has curtailed new capital investments and is considering further cutbacks in operating costs.