DNO Welcomes Reports of Iraq-Kurdistan Oil Export Deal, But Seeks Payment Guarantees

Peregraf

Norwegian oil and gas operator DNO ASA said today it welcomes reports of an agreement between the Federal Government of Iraq, the Kurdistan Regional Government (KRG), and a group of international oil companies to resume crude oil exports from Kurdistan through the Iraq–Türkiye Pipeline, but stressed that it requires payment guarantees for both past arrears and future sales.

"DNO has consistently stated that it is eager to resume exports but pursuant to agreements that ensure payment surety for both past arrears and future exports based on the legal, economic and commercial terms of the production sharing contracts the Company holds with Kurdistan," the company said in a statement released from Oslo.

DNO Executive Chairman Bijan Mossavar-Rahmani underlined the company’s unique exposure compared to other international operators. "Importantly, as the largest producer, the arrears owed to us by the KRG dwarf those of many of the others," he said. "Which also means that our exposure to future payment risk is also substantially higher than any other company."

Mossavar-Rahmani added that DNO has made proposals to Erbil to resolve the issue through "easy fixes that can be quickly agreed."

The company, together with its partner Genel Energy, has begun repairing damage to the Tawke and Peshkabir fields following drone attacks in July. DNO said it plans to drill eight new wells in the Tawke license in 2026, targeting gross operated production of up to 100,000 barrels a day. Currently, its entitlement share of oil is sold domestically on a cash-and-carry basis, at prices in the low USD 30s per barrel.

The statement comes a day after informed sources told Peregraf that the Iraqi Oil Ministry, the KRG Ministry of Natural Resources, and international oil companies signed a tripartite deal in Erbil to resume exports. Reuters also reported that the breakthrough will allow exports of about 230,000 barrels per day (bpd) from Kurdistan, suspended since March 2023, to restart within 48 hours once Iraq’s cabinet approves the agreement.

According to Iraqi officials cited by Reuters, the plan calls for the KRG to deliver at least 230,000 bpd to the federal oil marketer SOMO while reserving 50,000 bpd for local use. An independent trader will handle sales from the Turkish port of Ceyhan using SOMO’s official prices, with $16 per barrel to be transferred into an escrow account for proportional distribution to producers.

However, the draft agreement does not specify how or when oil companies will be repaid around $1 billion in arrears accumulated between September 2022 and March 2023. Sources told Reuters that DNO and Genel Energy, the largest producers in the region, had not yet agreed to the proposed terms and continue to press for repayment of nearly $300 million owed to DNO alone before exports were halted.

The Iraq–Türkiye Pipeline has been closed since March 2023 after an international arbitration ruling ordered Ankara to pay Baghdad $1.5 billion for unauthorized Kurdish exports. Turkey is appealing the ruling but has signaled readiness to restart flows. Washington has also pressed Baghdad, Erbil, and oil companies to reach a deal to restore Kurdistan’s exports.