Norway's DNO suspends oil production in Kurdistan Region

Shafaq News/ DNO, a Norwegian oil and gas operator, announced on Wednesday the orderly closure of its oil fields in the Kurdistan Region of Iraq.

The company began the shutdown four days after it was directed to temporarily stop deliveries through a Turkish pipeline heading to the port of Ceyhan on the Mediterranean. This followed an arbitration ruling in favor of Iraq against Turkey for exporting Kurdish oil without the consent of Baghdad.

DNO has shifted oil production to storage tanks, but capacity is limited and insufficient.

The company's average production operating the Tawki and Bishkabir fields was 107,000 barrels of oil per day in 2022,

The Iraqi-Turkish pipeline transported about 400,000 barrels per day of Kurdish oil and another 70,000 barrels of Iraqi oil per day for export to the Mediterranean and other refineries.

Bijan Musaffar Rahmani, CEO of DNO, expressed his disappointment over the ongoing supply disruptions in the oil industry, saying, "It is unfortunate that it has come this far given the potential impact of ongoing supply disruptions on oil prices and at a fragile time in global financial markets."

On March 23, the International Commercial Court ruled in favor of Baghdad's claim that the independent exports of crude oil by the Kurdistan Regional Government (KRG) "violate a 1973 agreement" between Iraq and Turkey regarding flows from the ITP pipeline.

The court also stated that the State Oil Marketing Organization (SOMO) should have the right to market all Iraqi oil. As a response, Iraq's oil ministry announced on March 25 that it would hold discussions with Kurdistan and Turkey authorities regarding Ceyhan exports. The goal is to ensure that crude oil flows through the port can continue, enabling SOMO to fulfill its obligations to international customers.