DNO International ASA has redirected nearly one third of its crude oil production in the Kurdistan Region of Iraq to sales to the domestic market in a move that will improve predictability and stability of its revenue stream.
The Company recently signed contracts with three buyers for delivery of around 675,000 barrels of oil from the Tawke and Bastora fields at prices ranging between USD 50-55 per barrel. Daily deliveries into these contracts are averaging 10,000 barrels a day. Payments are received in advance of deliveries and accrue fully to DNO's account.
"We are very pleased to have been given the green light by the authorities to commence cash sales to the local market and at a price twice last year's levels," stated Helge Eide, President and Managing Director. "At current rates, DNO's local sales bring another USD 15 million in payments to the Company on a monthly basis which allows our operations to be self funding across our portfolio," he added.
The Company expects to continue its domestic sales on an on-going basis, though future volumes and prices will be contingent on market conditions. Exports meanwhile have declined due to continuing technical glitches in the northern Iraq pipeline system and now average around 25,000 barrels per day.
The first test on the Summail-1 exploration well on the Dohuk license has been completed and the lowermost Triassic zone was found to be water bearing. This is the first of several tests to be undertaken in the well over the coming weeks.