DNO boosts Tawke field stake in settlement with Kurdistan regional government

DNO ASA, Oslo, has been assigned the Kurdistan regional government’s 20% interest in the Tawke license as part of a settlement of payments owed to the company for past crude oil deliveries.

DNO ASA, Oslo, has been assigned the Kurdistan regional government’s 20% interest in the Tawke license as part of a settlement of payments owed to the company for past crude oil deliveries.

DNO now holds 75% operated stake in the license containing Tawke and Peshkabir fields with combined proved and probable reserves of more than 500 million bbl and production of 100,000 bo/d. Partner Genel Energy PLC, London, holds the remaining 25%.

Over a 5-year period, DNO will receive 3% of gross license revenues each month from the government while Genel will receive 4.5%. The settlement is effective Aug. 1.

The government also has discharged DNO from certain payment obligations including production bonuses, license fees, and a $150-million water purification project that is no longer required by the government. Genel will no longer have to make capacity building payments.

“We are very pleased with the government’s initiative to settle receivables and normalize export payments to the operators,” said Bijan Mossavar-Rahmani, DNO’s executive chairman.

The government owed DNO and Genel payments for oil exports during 2014-15 as crude oil prices dropped and Iraq’s government withheld budget payments to Kurdistan.

Meanwhile, DNO said it has mobilized a third rig as part of an expanded drilling program at Tawke field comprising 10 production wells, of which six are deep Cretaceous and four shallow Jeribe wells.

Also on the Tawke license, the company said the Peshkabir-2 well has been producing from the Cretaceous reservoir at a steady rate of 4,700 b/d of 28° gravity oil since June. The well can produce an additional 2,500 b/d of 24° gravity oil from the Jurassic reservoir.

The Peshkabir-3 well, spudded in July, is drilling at 2,400 m toward a target depth of 4,000 m to appraise the northern extension of the Cretaceous reservoir. An early production facility has been acquired for installation at the field, with both Peshkabir wells planned onstream by yearend and two additional wells planned in 2018.

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