SULAIMANI, Kurdistan Region — Norwegian oil and gas operator DNO has announced an orderly shutdown of its oil fields in the Kurdistan Region of Iraq following an arbitration ruling in favor of Iraq against Turkey for exporting Kurdish oil without Baghdad’s approval.
The shutdown was initiated four days after DNO was instructed to temporarily cease deliveries to the Iraq-Turkey Pipeline due to capacity limitations in its storage tanks, according to a statement.
The shutdown affects DNO’s Tawke and Peshkabir fields, which contributed to a combined production of 107,000 barrels of oil per day in 2022, accounting for a quarter of the region’s total exports. Peshkabir production has already ceased, and deferred maintenance will be conducted, while Tawke production is expected to shut down in the coming days. The shutdown comes at a critical time for global financial markets and could potentially impact oil prices.
DNO’s Executive Chairman Bijan Mossavar-Rahmani expressed his disappointment that the shutdown was necessary.
“It is unfortunate it has come to this given the likely impact of a continuing supply disruption on oil prices and at a fragile time in global financial markets,” Rahmani said.
Prior to the shutdown, the Iraq-Turkey Pipeline transported approximately 400,000 barrels of Kurdish oil and 70,000 barrels of Iraqi oil per day to refineries in the Mediterranean and other locations.
Global crude prices continued to climb for the third consecutive day on Wednesday, driven by concerns of tightening supplies following a halt to the exports from the Kurdistan Region.
