The Norwegian oil and gas company is once again investing in Kurdistan after reaching a new payment deal from the KRG
DNO restarts spending in Kurdistan, picking up Exxon stake
Norway’s DNO has resumed investing in the Kurdistan Region of Iraq, picking up half of ExxonMobil’s stake in the Baeshiqa license, the company said on Friday.
The Oslo-listed company, controlled by RAK Petroleum, will pick up operatorship and half of ExxonMobil’s license with a 40 per cent paying interest. ExxonMobil will retain 40 per cent while Turkish Energy Company holds the remaining 20 per cent and the Kurdistan Regional Government (KRG) keeps a 20 per cent carried interest.
"Following regularisation of export payments and a landmark agreement with the government to close out our historical receivables, our foot is back firmly on the accelerator," said Bijan Mossavar-Rahmani, DNO's executive chairman.
The deal comes on the heels of the company’s announcement last month that it had made a new deal with the Kurdistan Regional Government (KRG) to offset arrears. The agreement gave DNO a 20 per cent interest from the KRG in the Tawke license, bringing the company’s operated stake to 75 per cent.
The latest deal, subject to government approval, will add to DNO’s Kurdistan current portfolio which has two licenses. Though security concerns have previously played a major role in the Baeshiqa license.
The area is only 20 kilometres east of Mosul, the northern Iraqi city that has been the battleground for clashes between international forces and Islamic State. This has halted many activities, including ExxonMobil’s previous work.
The US company had carried out geological studies and constructed a drilling pad before work was stopped amid escalating security conditions in the region. However, the liberation of the city in July has re-opened the area and the license is expected to have multiple targets including geological formations that are historically known to be a source rock for oil and gas.
DNO plans to drill an exploration well in the first half of next year with a second to follow on a separate structure, the company said.