Uchenna Izundu
International Editor
LONDON, Jan. 2 -- Norway's DNO ASA will begin oil production from its Tawke crude oil project in northern Iraq in first quarter, 2007, the company said Dec.28.
The company stands to earn more from this production because it recently signed an agreement with the Kurdistan regional government whereby DNO will assume 100% of the funding obligations of its production-sharing agreements in return for an additional 15% increase in its working interest.
DNO can recover its well costs from future Tawke oil production under the cost oil entitlement because the well is located within the Dihok PSA area. In the government negotiations, DNO said it made some adjustments to its Dihok PSA area.
"Some areas at the eastern border have been removed in return for receiving some new acreage to the south," DNO said. "Another area has also been relinquished, and no further relinquishments will be required until June 2011."
To deliver Tawke oil to the main northern pipeline, DNO installed 8 km of 42 km pipeline, and will transport central processing facilities with a 50,000 b/d capacity to the Tawke area for installation and commissioning.
In 2007, DNO plans to drill 18 development wells, which include oil producers and water injectors. Three rigs will be dedicated to Tawke for most of 2007.
DNO said that its Tawke No. 2 appraisal well, located 2 km west of the Tawke No.1 discovery well, was an oil producer following an oil flow test of 3,840 b/d.
DNO already has moved its rig to the Tawke No. 4 location some 0.8 km to the northeast of Tawke No.1 and will develop Tawke-4 as an oil producer in early 2007.
"The rig will commence operations at Tawke No. 1 where some deeper reservoir intervals (> 2,000 m) will be flow-tested. Thereafter the rig will be used for development drilling across Tawke field," DNO added.
Dihok seismic
DNO said it also plans to carry out an additional 300 km of 2D seismic within the Dihok PSA at the end of the winter in first quarter, 2007.
No oil flows were seen with its 3, 551 m Khanke No. 1 well on the Dihok PSA area despite tests at three individual intervals that indicated hydrocarbons.
DNO will move its rig from Khanke to the Tawke No. 3 exploration-appraisal well site on the Tawke structure at the eastern extension of the Tawke area. "This well will penetrate both the oil-producing interval confirmed by Tawke No. 1-1A and Tawke No. 2, as well as the deeper intervals that were proved to be oil bearing in Tawke No.1, but were not properly tested. If oil-bearing intervals are confirmed and commercial flow rates are achieved, then Tawke No. 3 will be completed as an oil producer," DNO said.
DNO also has completed 77 km of 2D seismic data across the Erbil PSA area.
Contact Uchenna Izundu at [email protected].
