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

People & Company News

Tauber Oil Opens West Calcasieu Port Operations

Tauber Oil Company of Houston has become the West Calcasieu Port’s newest tenant.    “Tauber Oil is a service-oriented wholesale energy marketing company with

NewLead Expands Fleet to 10 Vessels

NewLead Holdings Ltd. announced that it recently added five bitumen tanker vessels, expanding its fleet to 10 vessels in less than a year while performing on its

SKF Expands Electric Motor Repair Network

Electric motors are among the highest in reliability incident reports, said SKF Canada, noting that for many companies, electric motor failures lead to a continual

Energy

Libya Returns Fuel Tanker to Rival Government

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration,

US Proposes Allowing Oil, Gas Drilling off Atlantic Coast

The Obama administration on Tuesday proposed allowing for the first time oil and gas exploration in a wide swath of U.S. waters off the Atlantic Coast.   The

NOIA: Draft Offshore Lease Program Both Hits and Misses

National Ocean Industries Association (NOIA) President Randall Luthi issued a statement on the 2017-2022 Draft Proposed OCS Oil and Gas Leasing Program, stating the U.

News

Libya Returns Fuel Tanker to Rival Government

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration,

Tauber Oil Opens West Calcasieu Port Operations

Tauber Oil Company of Houston has become the West Calcasieu Port’s newest tenant.    “Tauber Oil is a service-oriented wholesale energy marketing company with

US Proposes Allowing Oil, Gas Drilling off Atlantic Coast

The Obama administration on Tuesday proposed allowing for the first time oil and gas exploration in a wide swath of U.S. waters off the Atlantic Coast.   The

People in the News

NOIA: Draft Offshore Lease Program Both Hits and Misses

National Ocean Industries Association (NOIA) President Randall Luthi issued a statement on the 2017-2022 Draft Proposed OCS Oil and Gas Leasing Program, stating the U.

Matiss Backs European Shipping Week

The Presidency of the Council of the European Union has granted official patronage to the forthcoming European Shipping Week (ESW) which will be held in Brussels during March 2‐6, 2015.

Bollinger Promotes Remont to VP

Bollinger Shipyards President and CEO Ben Bordelon announced today another key internal promotion designed to enhance the strategic value of the Company.   “I

Government Update

Libya Returns Fuel Tanker to Rival Government

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration,

US Proposes Allowing Oil, Gas Drilling off Atlantic Coast

The Obama administration on Tuesday proposed allowing for the first time oil and gas exploration in a wide swath of U.S. waters off the Atlantic Coast.   The

NOIA: Draft Offshore Lease Program Both Hits and Misses

National Ocean Industries Association (NOIA) President Randall Luthi issued a statement on the 2017-2022 Draft Proposed OCS Oil and Gas Leasing Program, stating the U.

Logistics

CakeBoxx, Globe Tracker Partner for Asset Tracking

Globe Tracker International, a company in global autonomous asset tracking, monitoring, remote management and data sharing services, and CakeBoxx Technologies,

Northeast Winter Storm Disrupts Shipping

Winter Storm Juno, which has brought snow and gale force winds to the North East Coast of the United States, is causing severe disruption to shipping across the entire coastline.

Carnival, China Merchants Sign MOU

MOU will explore both Port & Destination Development and Ship-Owning joint ventures with the goal of potentially launching China’s first world-class domestic cruise brand.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2164 sec (5 req/sec)