DNO Starts Storing Oil in Kurdistan After Exports to Turkey Halted

By Dominic Chopping

Norwegian oil-and-gas operator DNO ASA said Monday that it has started storing oil in tanks at its fields in the Kurdistan region of Iraq after exports via a pipeline to Turkey were halted.

The stop in exports comes after an arbitration ruling to settle a long-running dispute over Kurdish oil exports to Turkey. The federal government of Iraq successfully argued that Turkey breached an agreement by allowing oil from the semi-autonomous Kurdistan region to be transported through the pipeline to the Turkish port of Ceyhan without prior approval from Baghdad.
In a statement on Saturday, the Kurdistan Regional Government said that following the court’s decision, a delegation will visit Baghdad for talks to resolve the issue.
DNO began diverting oil production from its operated Kurdistan fields to storage tanks on Saturday, with the tanks able to accommodate several days’ worth of production, it said.
“DNO notes from public reports that authorities in Ankara, Baghdad and Erbil are in discussion to reach agreements that will allow oil exports to resume through the pipeline to the port of Ceyhan on the Mediterranean,” it said in a statement.
Prior to the shutdown, the pipeline carried around 400,000 barrels a day of Kurdish oil and another 70,000 barrels a day of Iraqi oil to global markets.
DNO shares trade 12% lower at NOK9.54 in early trade in Oslo.
Write to Dominic Chopping at [email protected]