OSLO, Aug 21 (Reuters) – A new pipeline to carry crude oil from Iraq's autonomous Kurdistan region to Turkey, which has angered the central government in Baghdad, is nearing completion, Norwegian oil firm DNO International said on Wednesday.
Iraqi Kurdistan and Baghdad are at odds over how to split revenues from oil and gas production in northern Iraq.
Recently the region has been trying to establish its autonomy from the capital by building a pipeline to Turkey so it could export its hydrocarbons there.
According to DNO, which produces oil at the large Tawke field in northern Iraq, the pipeline is within a few kilometres of the border with Turkey, close to a station where crude is loaded onto trucks.
"The KRG (Kurdish Regional Government) pipeline is within a few hundred metres of the Fishkhabour pumping station," said Nicholas Atencio, general manager of DNO's operations in Kurdistan.
Fishkhabour is situated some five kilometres (three miles) from the border with Turkey.
Once it reaches Fishkhabour, it remains to be seen whether the new pipeline will be tied into an existing line running from Kirkuk to the Turkish port of Ceyhan at a metering station controlled by Baghdad, or beyond there, either before the Turkish border or after it.
The Kirkuk-Ceyhan pipeline has suffered frequent disruptions due to technical problems and attacks by insurgents.
Speaking at DNO's second-quarter results presentation, Atencio noted the company was not involved in exporting its own crude via the pipeline. The company is for the moment unable to export its crude from Tawke and so sells it locally.
But in a sign of its growing confidence, DNO said Tawke had seen its highest production in a single day, at some 113,000 barrels, and its highest sales in a single day, at 102,000 barrels, during the second quarter.
"Internally we play it conservatively. (But) we are pleased with the progress. Our milestones gives you a sense of what we can do," DNO Chairman Bijan Mossavar-Rahmani said.
The company said it would be able to produce some 200,000 barrels per day at Tawke by the fourth quarter of 2014.
Earlier on Wednesday, DNO reported second-quarter earnings that beat expectations.
Its quarterly net profit of 280 million crowns ($47.10 million) beat expectations of 244 million and followed a loss of 176 million crowns a year earlier.
($1 = 5.9453 Norwegian kroner)
(Reporting by Gwladys Fouche; editing by Jason Neely)
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