DNO partly resumes oil production in Iraq

DNO swung to an operating loss of $15 million for the second quarter from a year-ago profit of $81 million, as its overall net production dropped to 14,400 barrels of oil equivalent per day, the lowest level in 13 years.

DNO halted its production in Iraq's semi-autonomous region of Kurdistan after Turkey in March shut down an export pipeline following Baghdad's win in an arbitration case at the Paris-based International Chamber of Commerce (ICC).

DNO on Thursday said its flagship Tawke field was now producing at a rate of 40,000 barrels of oil per day (bpd), down from 44,400 in the first quarter, while the nearby Peshkabir field remained shut.

"While there is no light at the end of the export pipeline, we are seeing the headlights of more and more incoming tanker trucks loading up our Tawke cargoes on a cash-and-carry basis," DNO Executive Chairman Bijan Mossavar-Rahmani said in a statement

Iraq asked Turkey to restart oil export flows in May after reaching a deal with the Kurdistan Regional Government (KRG) on Kurdish oil sales and payments, but the timing of the pipeline restart remains uncertain.

About one-half of Tawke's production is delivered to the Kurdistan Regional Government and the rest is sold to local trading companies and transported by road tankers, with prices averaging just over 50% of pre-closure levels, DNO added.

The sales are split 75% and 35% between DNO and its Tawke license partner, Genel Energy

($1 = 10.6352 Norwegian crowns)