Exports from the semi-autonomous region of Kurdistan will resume on Saturday, September 27, following agreements reached between Iraq’s federal government, the Kurdistan Regional Government, and a group of international oil companies, Norway-based oil producer DNO ASA said on Friday.
However, DNO, one of the major foreign producers in Kurdistan, will not ship its crude directly to the Iraq-Turkey pipeline to the Turkish Mediterranean port of Ceyhan.
Instead, DNO will deliver the Kurdistan Regional Government’s share of sales from the company’s operated Tawke license, currently averaging 38,000 barrels per day (bpd), for export. The balance of the oil, representing the share of sales the foreign contractor group consisting of DNO and Genel Energy International Limited, currently averaging 30,000 bpd, will continue to be sold to local buyers under existing contracts.
DNO ASA and British Genel Energy have refused to sign the deal reached by the federal government, KRG, and the other oil companies until the Kurdistan Regional Government provides guarantees that they will receive the money it owes them.
“DNO is pleased that exports of oil from the Kurdistan Region have been unlocked and will now flow to international markets,” said DNO executive chairman Bijan Mossavar-Rahmani.
“We have elected not to engage directly in exports at this time and will continue to sell our oil on a monthly, cash-and-carry, basis to our buyers at a per barrel price in the low USD 30s,” he added.
Oil exports from Kurdistan have been halted for two and a half years, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports.
The resumption of flows on September 27 is expected to add about 230,000 bpd of oil from Kurdistan to the international market.
Additional supply from Kurdistan is set to hit the oil market at a time when analysts, forecasters, and traders expect oversupply to start building with the end of the peak summer demand season.
By Tsvetana Paraskova for Oilprice.com
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