Key Points:
- DNO pipeline export restart: Resuming exports via Iraq-Türkiye Pipeline.
- Investments: Repairs and eight new wells planned in 2026.
- Market impact: Higher-margin international sales and lower transport costs.
DNO ASA said it welcomes reports of progress toward the DNO pipeline export restart through the Iraq-Türkiye Pipeline, emphasizing that the resumption should be accompanied by clear payment guarantees to secure both arrears and future shipments.
“DNO’s exposure is different than that of other international oil companies,” Executive Chairman Bijan Mossavar-Rahmani said. “Importantly, as the largest producer, the arrears owed to us dwarf those of many of the others, which also means that our exposure to future payment risk is also substantially higher than any other company.”
Mossavar-Rahmani noted that the company has presented proposals to address outstanding payment issues through what he described as “easy fixes that can be quickly agreed.”
Operational investments continue
The Norwegian operator, together with joint venture partner Genel Energy International Limited, has continued to invest in its producing fields despite export uncertainties. Following drone-related damage in July, DNO increased spending on repairs at the Tawke and Peshkabir fields.
Looking ahead, the company plans to drill eight new wells in 2026 at the Tawke license area. The program is expected to support gross operated production capacity of up to 100,000 barrels per day. These investments, according to the company, reflect confidence in the long-term value of its Kurdistan assets.
At present, DNO markets its entitlement share of crude locally. Oil is transported by road tankers to refineries under cash-and-carry arrangements, with realized prices in the low $30s per barrel. The company has described this as a temporary measure, with the DNO pipeline export restart offering a more efficient and scalable route to market.
Pipeline as a key logistics corridor
The Iraq-Türkiye Pipeline, which connects northern Iraq to the Mediterranean port of Ceyhan, is a critical export corridor for regional crude. Industry analysts note that a restart would not only improve utilization of upstream production capacity but also enhance supply stability for global markets.
Pipeline exports allow for higher volumes at lower transportation costs compared with road-based alternatives. For operators like DNO, the infrastructure is central to realizing economies of scale and capturing higher netbacks on international sales.
Industry exposure and financial certainty
For international oil companies active in the region, the main concern is securing predictable payments under production sharing arrangements. Delays in past settlements have created exposure to arrears, with larger producers carrying proportionally higher risk.
DNO has stated that its payment exposure is greater than peers due to its production scale, underscoring the importance of binding financial mechanisms tied to any export resumption. The company’s position highlights the broader industry need for contract enforcement and reliable settlement systems to underpin new investment.
Outlook
A DNO pipeline export restart would represent a significant step toward normalizing regional output, boosting both company revenues and export capacity utilization. For DNO, it would also enable a shift from short-term local sales toward higher-margin international markets.
While negotiations on export and payment systems continue among stakeholders, DNO and its partners are maintaining investment momentum. The company’s drilling program and infrastructure repairs are aimed at ensuring that production capacity is in place once the pipeline becomes fully operational again.
Visit more of our news! Oil Gas Energy Magazine.
