DNO Eyes First Kurdistan Crude Shipment

Posted by Joseph Keefe
Thursday, August 21, 2014

Norwegian firm DNO expects its first shipment of oil from Kurdistan to be sold on the international market by the end of the year and said it was committed to its operations in the region despite the recent flare-up in violence.

The firm could until recently only sell oil on the local Iraqi market, at lower prices than it would have got on the international oil market, due to a long constitutional fight between the region and Baghdad over independent oil sales.

That changed earlier this month when the Kurdish Regional Government allowed oil firms to seek out international buyers. Oil revenue is a lifeline for the KRG, whose peshmerga fighters are fighting Islamic State militants.

"I would be disappointed if by the end of the year we haven't begun to sell oil to international markets on some ongoing basis," DNO executive chairman, Bijan Mossavar-Rahmani, told Reuters after presenting the firm's second-quarter results.

He declined to say if DNO had talked to international buyers over shipping its oil. Average second quarter output at its prize field in the region, Tawke, was 110,000 barrels per day.

"Volumes are driven by tankers. Typically, they are a million barrels so from Tawke's point of view that is 6-7 days of production," he said.

Crude oil flow on Kurdistan's pipeline to Turkey resumed this week after upgrade work and is running at an increased rate of 200,000 bpd. So far, 7.8 million barrels of Kurdish oil have flowed through the independent pipeline, of which 6.5 million have been loaded onto tankers for export.

DNO said it had not been able to record revenues for 2.2 million barrels of Tawke oil which was piped into Turkey for onward transfer to the Mediterranean export terminal at Ceyhan.

Earlier this month Reuters reported that Iraqi Kurdistan was starting to find more buyers for oil now being delivered by the pipeline after struggling to sell the initial cargoes due to objections from Baghdad.

SECURITY


Islamic State fighters have advanced into Kurdistan this month, coming within a half hour's drive of Arbil, the capital of the region and a hub for some oil companies.

As a result, a number of energy firms have shut production and evacuated all their staff. But not DNO, which brought in staff from Oslo and Dubai to reinforce operations, and said it remained committed to working in the region.

"Some people have requested to leave, especially British contractors, because the Foreign Office put up a notice for British subjects to leave Kurdistan," said Mossavar-Rahmani.

"But we have had others going in as some were leaving. We have been comfortable with the security arrangements in place."

DNO had stepped up security protocols and retained key operational staff, he said.

DNO said a number of its suppliers and contractors have halted operations and left the country, so it will shift to work with local suppliers, although it realises progress on some work will be affected by factors beyond its control.

"Operations at Tawke field have continued without interruption and the Tawke expansion programme is on track, though we recognise that the timing of some projects across our three Kurdistan blocks are likely impacted by developments beyond our control," the firm said in a statement.

Reporting second-quarter results on Thursday, DNO posted earnings just short of expectations with net profit down 7.5 percent at $44.4 million, below the average forecast of $45 million given in a poll of analysts.

DNO's oil production surged in the second quarter as Tawke output rose 78 percent on the previous three months to 81,669 barrels of oil equivalents per day, above forecasts for 70,942 boepd.

Shares in DNO were down 0.5 percent at 1132 GMT, lagging an Oslo benchmark index up 0.61 percent.


Reporting by Gwladys Fouche and Balazs Koranyi

Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

USS Montpelier Modernization Contract for General Dynamics

The U.S. Navy has awarded General Dynamics Electric Boat a $46.4 million contract for planning efforts in support of maintenance and modernization work on USS Montpelier,

Pentair Opens Aquaculture Center of Excellence

Mindful that fish farming has the potential to help meet an expanding  population's need for protein in a world with increasing water constraints, Pentair announced

Scorpio Tankers' Buyback Plan, Newbuild Delivery

Scorpio Tankers Inc. announced today (i) a new $250 million Securities Buyback Program, (ii) that it has recently taken delivery of an MR product tanker and

Energy

Scorpio Tankers' Buyback Plan, Newbuild Delivery

Scorpio Tankers Inc. announced today (i) a new $250 million Securities Buyback Program, (ii) that it has recently taken delivery of an MR product tanker and

Kongsberg Contracted to Support FLNG Conversion

Kongsberg Maritime secures position in the LNG market with electrical and automation contract for Golar Hilli FLNG   Keppel Shipyard in Singapore and Black & Veatch in the U.

Statoil Awarded Licenses Offshore Nicaragua

Statoil informs it was today awarded four licenses offshore the Nicaraguan Pacific, covering an area of about 16,000 km2 in the largely unexplored Sandino Basin.

News

USS Montpelier Modernization Contract for General Dynamics

The U.S. Navy has awarded General Dynamics Electric Boat a $46.4 million contract for planning efforts in support of maintenance and modernization work on USS Montpelier,

Pentair Opens Aquaculture Center of Excellence

Mindful that fish farming has the potential to help meet an expanding  population's need for protein in a world with increasing water constraints, Pentair announced

Scorpio Tankers' Buyback Plan, Newbuild Delivery

Scorpio Tankers Inc. announced today (i) a new $250 million Securities Buyback Program, (ii) that it has recently taken delivery of an MR product tanker and

People in the News

Kintetsu World Express Acquires NOL's APL Logistics Shares

Neptune Orient Lines Limited (“NOL”) is pleased to announce that it has today completed the sale of its logistics business, APL Logistics Ltd (“APLL”), to Kintetsu World Express, Inc.

Mass. Maritime Taps McDonald as New President

EVP Fran McDonald tops a field of five; choice still must be approved by Massachusetts Board of Higher Education.   Pending a confirmation vote by the Massachusetts Board of Higher Education (BHE),

Frontline Beats Q1 Forecasts, Inks Ship Finance Deal

Crude oil tanker firm Frontline posted first-quarter operating profit above expectations on Friday and said it had renegotiated its relationship with chartering

Government Update

USS Montpelier Modernization Contract for General Dynamics

The U.S. Navy has awarded General Dynamics Electric Boat a $46.4 million contract for planning efforts in support of maintenance and modernization work on USS Montpelier,

Great Barrier Reef Kept Off UNESCO 'Danger' List

A heritage committee of the UNESCO cultural agency stopped short of placing Australia's Great Barrier Reef on an "in danger" list, but the ruling on Friday raised

Mexico Removes Bid Limit on Shallow Water Oil Tenders

Mexico's oil regulator voted on Friday to relax previously established rules on bidding terms and contracts that form the first step in an historic sector opening

Logistics

Kintetsu World Express Acquires NOL's APL Logistics Shares

Neptune Orient Lines Limited (“NOL”) is pleased to announce that it has today completed the sale of its logistics business, APL Logistics Ltd (“APLL”), to Kintetsu World Express, Inc.

Hiab to Launch the New Z-series Crane

Hiab launched the HIAB Z-HiPro 191 and HIAB Z-PRO 171 crane. Part of the new HIAB Z-series, the cranes feature the ability to be folded into a Z position and

EXG Wins CII SCALE Award

Express Global Logistics Pvt Ltd (EXG) won the Supply Chain and Logistics Excellence (SCALE) Award 2015 organized by CII (Confederation of Indian Industry).

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Pod Propulsion Salvage Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1983 sec (5 req/sec)