Partial start of oil production in northern Iraq

The Norwegian DNO ASA, which produces oil in northern Iraq, announced last month that it had begun test oil production from the Tawke field and was continuing production due to strong demand. The Norwegian DNO ASA company partially resumed production at the Tawke oil field it operates in northern Iraq, despite the main export pipeline being closed. According to a statement from the company, DNO restarted production last month. Daily production is averaging 40,000 barrels. The company said it restarted production to conduct integrity tests of the field and continued production due to strong local demand. The Peshkabir field, which is close to the field, remains closed. International companies operating in the Kurdish Regional Government of Iraq had been forced to cut production after a payment dispute between Iraq and Turkey cut off the main export route. The majority of the oil in northern Iraq, which makes up about one-tenth of the country’s total production, is transported via pipeline to the Ceyhan port in the Mediterranean. DNO’s chairman Bijan Mossawar-Rahmani said the following regarding the developments: “There is no light at the end of the export pipeline.” The company sells half of its production from the Tawke field to the Kurdistan Regional Government, while the rest goes to local traders who transport it by truck. DNO said it received half as much oil from the field as it did before the pipeline was closed. Ankara halted the flow of oil through the pipeline in March after an arbitration court ruled that Turkey pay Iraq about $1.5 billion in compensation for transporting oil through the pipeline without the approval of the Baghdad government. The arbitration process between the two countries has been the culmination of a long-standing dispute between Baghdad and Erbil over revenue from oil sales. The restarting of the pipeline is expected to be a key agenda item during President Recep Tayyip Erdoğan’s visit to Baghdad. The Iraqi government announced the visit without giving a date, but Turkey has not yet confirmed the visit. Sources with knowledge said Ankara wants to reach an agreement before reopening the pipeline.