March 16 (UPI) -- With a strong focus on the Kurdish north of Iraq, Norwegian oil company DNO said it posted a $6 million profit last year on lower costs and better payments.
DNO said its production for last year was driven in large part by operations at its flagship Tawke asset in the northern Kurdish region of Iraq. Last year, production averaged 107,300 barrels of oil per day, of which 98 percent was sent for exports through Turkey.
The company started the year by saying steady payments from the Kurdish government for exports and improved market conditions that followed gains in crude oil prices from last year's lows meant more drilling opportunities in the region. Export payments were creating momentum for 2017, DNO Executive Chairman Bijan Mossavar-Rahmani said at the time.
"DNO recorded an operating profit of $6 million in 2016 on the back of lower costs and higher paid revenues in the Kurdistan region of Iraq, following an operating loss of $174 million a year earlier," the company's annual report stated. "Annual revenues stood at $202 million, up from $187 million during 2015."
The company attributed an improved payment arrangement with the Kurdish government established in early 2016 for setting a better foundation beneath its regional operations. DNO last year said it needed a "firm plain of repayment" of $1 million in arrears from the Kurdish government in order to proceed with new investments at its flagship asset.
DNO held out a new discovery with the Tawke license area as a major achievement last year, adding 47.9 million barrels of oil equivalent of gross contingent resources to its portfolio. Looking ahead, the company said it plans to spend $100 million on operations that include four new production wells at Tawke.
Iraq agreed to cut about 210,000 bpd from its production under the terms of a managed decline agreement coordinated by the Organization of Petroleum Exporting Countries. The central government in Baghdad said in the past the semiautonomous Kurdish government wasn't contributing to the arrangement.