Operator Genel Energy announced expanded drilling operations at the Ber Bahr-1 exploration well in the Kurdish north confirmed the commercial oil discovery.
Genel Energy, which has headquarters in England and Turkey, and Gulf Keystone each have a 40 percent stake in the Ber Bahr block. The semiautonomous Kurdistan Regional Government holds the remaining 20 percent in a production-sharing contract.
"This is another significant discovery and the fifth across the four blocks the company has an interest in," Gulf Keystone Chief Operating Officer John Gerstenlauer said in a statement.
The exploration well was tapped last year, encountering a 980-foot column of oil but failed to yield any flow rates during initial testing. Recent operations produced around 2,000 barrels of oil per day, the companies said.
"The Ber Bahr well adds a further commercial oil discovery to Genel's already significant ... resource base," Genel Energy Exploration Director John Hurst said in a statement. "We plan to begin a phased development of the field in the second half of this year."
Oil in the Kurdish north is a source of contention between the semiautonomous government and the central government in Baghdad, which says some operations there are illegal.