Oslo: Norwegian oil company DNO has raised its stake in oilfields in northern Iraq to 55 per cent from 40 per cent by agreeing with the Kurdistan regional authorities to bear 100 per cent of the costs of production sharing agreements (PSAs), DNO said yesterday.
DNO is the first western oil company to begin exploration in postwar Iraq. It is working in northern Iraq under a 2004 deal with the Kurdistan regional authorities.
"The agreement with the Kurdistan Regional Government (KRG) whereby DNO will be responsible for 100 per cent of the funding obligations of the PSAs in return for receiving an additional 15 per cent working interest, has now been concluded and signed," DNO said in a statement.
DNO also said that some adjustments had been made to the Dihok PSA area in northern Iraq, with some areas at the eastern border removed in exchange for some new area in the south.
DNO also said that its Khanke well No. 1 in the Dihok PSA area was dry.
"Testing was undertaken in three individual intervals which had hydrocarbon shows while drilling, but no oil flow was achieved," DNO said in a statement.
"It is still very early in the exploration stage of the PSA areas, and a number of additional prospects and leads, which will be further investigated through exploration drilling, have been identified," DNO said.
DNO chief executive Helge Eide said in the statement that after significant progress in the area's Tawke early production project, the company should be ready to produce the first oil at Tawke in the first quarter of 2007, as earlier indicated.
"Achieving this important near-term target will mark another important milestone for KRG and DNO," Eide said.
DNO shares traded down 2.2 per cent at 11.54 Norwegian crowns at 8.27am GMT yesterday, underperforming a flat DJ Stoxx oil and gas index and a firm Oslo bourse benchmark index.