x Abu Dhabi, UAEFriday 19 January 2018

DNO reports surging production

DNO, the part-Ras Al Khaimah-owned company with operations in Kurdistan, reported a record rate of production from one of its wells.

DNO, the Norwegian oil company operating in Iraqi Kurdistan, reported a production increase of nearly a third during the second quarter on the back of record flows from its first horizontal well in the region.

A well at Tawke, an oilfield located near the borders of Syria and Turkey, flowed at a rate of 25,000 barrels per day (bpd), compared with the previous record of 10,000 bpd at another well in the same field.

The entry of horizontal drilling technology reflects the rapid pace of exploration in Kurdistan, until recently a virgin oil frontier blocked off from the oil industry's investment by the regime of Saddam Hussein. Monetisation has been less straightforward because of an ongoing dispute between the regional and federal governments over contracts that has stopped up export payments.

"We continue to 'de-risk' and deliver across our portfolio, and most impressively in our operations in the Kurdistan region of Iraq," said Bijan Mossavar-Rahmani, DNO's chairman.

DNO is drilling a second horizontal well at Tawke, and plans to drill at least one more before the end of the year.

Genel Energy, the company led by the former BP chief Tony Hayward, and the Kurdistan Regional Government are co-investors in Tawke.

Overall production at DNO, which also pumps oil and gas in Ras Al Khaimah, Oman and Yemen, rose to 38,720 bpd oil equivalent during the second quarter from 23,234 bpd during the same period last year.

It reported net profits of 280 million Norwegian kroner (Dh106.6m), compared with a lost of 176m kroner in the same period last year.

In the past two years, wildcatters in Kurdistan have been joined by the world's biggest companies - first ExxonMobil in a deal that pitted Baghdad against Erbil, then Chevron, Total and Gazprom.

DNO has, meanwhile, turned to other oil frontiers such as Somaliland, whose statehood is not recognised by many nations.