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Regular payments have given DNO the confidence to resume investment in Kurdistan and recent oil price rises should see its monthly income rise considerably. But as with other key IOCs, the firm faces a challenging operational environment and all have scaled back their production plans.
Norwegian independent DNO sought to paint a bullish picture of its operations in Iraqi Kurdistan during its Q1 2016 conference call on 4 May. However, while pledging to increase output from its Tawke field by 10,000 b/d in 2016, this merely brings it back up to the 2015 average of 135,000 b/d.
Given that production fell in the second half of 2015 as DNO cut investment due to payment uncertainty, the firm’s projections put it well below levels achieved during the past 12 months. Output averaged 153,346 b/d in Q2 2015, and 145,184 b/d in Q3, but just 91,700 b/d in the past quarter. In 2013, DNO was targeting output of 210,000 b/d for 2015, a figure its new 2016 target comes nowhere near.
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