Norway’s DNO ASA has partially restarted production at the Tawke oil field it operates in the semi-autonomous Kurdish region in northern Iraq, although the main export pipeline remains shut.
DNO restarted production at Tawke last month and production is averaging around 40,000 barrels per day, according to a company statement. DNO said it had restarted the field to conduct well integrity tests and maintain production due to strong local demand. The nearby Peshkabir camp remains closed.
International companies operating in the Kurdish region have been forced to cut production after a payment dispute between Iraq and Turkey cut off the main export route. Most of the barrels produced in northern Iraq, which accounts for around a tenth of the country’s total output, are routed to the Turkish port of Ceyhan on the Mediterranean.
“There is no light at the end of the export pipeline,” DNO Executive Chairman Bijan Mossavar-Rahmani said in the statement. The company sells half of Tawke’s output to the Kurdish government, with the rest going to local traders, who bring the oil by truck. DNO said it is getting about half as much oil as it did before the pipeline shut down.
Turkey halted flows from the pipeline in March after an arbitration court ordered it to pay about $1.5 billion in damages to Iraq for transporting oil without Baghdad’s approval. The arbitration between the two countries was the culmination of a long-running dispute between Baghdad and Erbil, the seat of the Kurdish regional government, over revenue from oil sales.
Restarting the pipeline is likely to be on the agenda during Turkish President Recep Tayyip Erdogan’s upcoming visit to Baghdad. The Iraqi government announced the visit without saying when it would take place, while the Turks have yet to confirm the trip. Ankara wants to negotiate a deal before reopening the link, people familiar with the matter have said.
