Norway's DNO financed for drilling in Kurdish region of Iraq

Company's executive chairman said drilling programs were supported by a Kurdish government that aims to go it alone.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   July 10, 2017 at 6:39 AM
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July 10 (UPI) -- Steady payments from a Kurdish government preparing an independence referendum in Iraq means more capital for drilling, Norway's DNO International said.

Budgetary constraints for the semiautonomous Kurdistan Regional Government caused contractual issues with international energy companies working in the region in the past. The Norwegian company said payments for exports and other work, however, have continued steadily for more than a year, which backed up its appraisal program in the Kurdish north.

"With 16 consecutive monthly export payments from the Kurdistan Regional Government in line with contractual entitlements, we've ramped up drilling with three rigs currently active across the portfolio," Executive Chairman Bijan Mossavar-Rahmani said in a statement.

The company exported the bulk of what it produced from its flagship Tawke license area in the Kurdish north through a north-bound pipeline for exports through Turkey. So far this year, the company said production from the license averaged about 115,000 barrels of oil per day.

Regional conflict has in the past disrupted some of the exports of oil from the Kurdish region, though the area is largely isolated from regional conflict attributed to the fight against regional militants, including the Islamic State, also known as ISIS, ISIL and Daesh.

Iraqi Prime Minister Haider al-Abadi declared victory during the weekend after the federal military recaptured the northern city of Mosul from IS following months of fighting. Mosul is about 50 miles west of Erbil, the Kurdish capital.

A referendum for independence from Iraq is set for Sept. 25. A spokesperson for the Kurdish government, Safeen Dizayee, told a delegation in London last week the referendum would correct past mistakes from Baghdad, including budgetary issues related to oil and entitlements for some of the Kurdish fighters supporting broader counter-terrorism efforts.

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.

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