ERBIL, Iraq, Jan. 9 (UPI) -- Results from a well in the Kurdish north of Iraq that was sidelined by lower crude oil prices are promising so far, Norwegian energy company DNO said.
DNO said testing from the Peshkabir-2 well in the Kurdish north yielded about 3,800 barrels of oil per day. The company said the well was planned for 2015, but lower crude oil prices and delayed payments from the Kurdish government caused planning setbacks.
Crude oil prices dropped from above $100 per barrel in 2014 to below $30 per barrel in early 2016, but have held above the $50 mark since late last year. The low price of crude oil limited revenue streams for exploration and production, but DNO said the market was showing signs of recovery.
"We are very encouraged by what we have seen so far in this well," Executive Chairman Bijan Mossavar-Rahmani said in a statement. "Certainly our subsurface and drilling teams have started the year on the right foot."
The rebound in crude oil prices followed an agreement in November by members of the Organization of Petroleum Exporting Countries to limit output starting in January. Iraq agreed to cut about 210,000 bpd from its production, though the central government in Baghdad said the semiautonomous Kurdish government wasn't doing its share.
Iraq in the past had balked at production restrictions, arguing it needed a steady revenue stream to support the fight against the terror group calling itself the Islamic State. Most of the fighting against the terror group has been centered near the Kurdish north.
The Norwegian energy company holds a majority stake in the license area drilled, alongside the Kurdish government, with a 20 percent stake. British company Genel Energy holds the remaining interest.