DNO Operations in Iraq

=History= DNO's activities in Iraq began in 2004, when DNO signed a production sharing contract (PSC) for the Tawke field with the Kurdistan Regional Government (KRG). DNO has PSCs for three contract areas in the Kurdistan region: Tawke, Dohuk, and Erbil. DNO has a local office in Erbil, while its activities in Kurdistan are managed from another office in Dubai.

The KRG temporarily suspended DNO's oil contracts in September 2009 after a document issued by the Oslo Stock Exchange implied that KRG Natural Resources Minister Ashti Hawrami was involved as a benefactor in the sale of DNO shares to Genel Enerji in October, allegations that the KRG denied and responded two by suspending DNO's contracts for six weeks.

DNO has been involved in two controversies regarding the hiring of senior US officials to promote its activities in Kurdistan. In 2005, Peter Galbraith was paid by DNO to advise it even as Galbraith in his official capacity as a US diplomat was advising on constitutional arrangements, which resulted in the KRG authorities claiming support for regional management of the oil industry. Then in mid-2010, former US ambassador to Iraq Zalmay Khalilzad was nominated for the board of DNO, though he later declined to fill the post.

=Activites and Contracts=

Tawke (Kurdistan)
The Tawke contract area, in which DNO has a 55% working interest, is located in northern Iraq near the Turkish and Syrian borders. After signing the initial PSC in 2004, DNO first discovered oil at the Tawke field in 2006, with test production of oil commencing by 2007. By 2009 the field had been connected to the existing northern pipeline system through Iraq, and international export from the field began in 2011.

The field had a production capacity of 70,000 bpd but actually produced about 50,000 bpd as of November 2011. A dispute between the KRG and Baghdad over oil exports cause production to slow to 17,000 bpd in the second quarter of 2012, but DNO managing director Helge Eide said in August 2012 that the company was on track to increase production at Tawke to 100,000 bpd by the end of the year.

Erbil (Kurdistan)
Drilling at the Erbil contract area just north of the KRG capital city of the same name, in which DNO has a 40% working interest, began in 2011. Two wells within the contract area, Benenan and Bastora, have been declared commercial. In November 2012 DNO announced that new quantities of oil were discovered at the Benenan-3 well, which the company said is expected to more than double the Benenan field's gross oil-in-place volumes from 300 million barrels to an estimated 600-700 million barrels.

Duhok (Kurdistan)
The Duhok contract area, in which DNO has a 40% working interest, is about 80 kilometers north of the city of Mosul; drilling at Duhok began in 2010 and as of November 2012 it remained an exploration area.

=References= 