Oil producer DNO announces record revenues

DNO International, an Iraq-focused oil producer with Ras Al Khaimah-based ownership, announced record operating revenues of Dh1.8 billion against an operating cash flow of Dh1.05bn.

Operating profit stood at Dh350.8 million, with the company citing one-off charges hindering the delivery of higher profit.

“2013 was a banner year for the company marked by several milestones, including great success from horizontal drilling at the Tawke field in Iraqi Kurdistan,” said Bijan Mossavar-Rahmani, DNO’s executive chairman. “We have an aggressive work programme planned for 2014 to drive up production and delivery capacity in existing fields while testing exploration prospects across the portfolio.”

Oil and gas production during the year rose to 39,170 barrels of oil equivalent per day (boepd) up from 38,354 boepd in 2012.

Production from its flagship Tawke field climbed to 155,000 barrels per day by the end of 2013 and is slated to reach 270,000bpd by the end of this year, with the completion of new horizontal wells.

The company, whose merger with the UAE’s RAK Petroleum was completed in 2011, has had its finances suffer from the political dispute over oil rights between the Kurdistan and central governments in Baghdad.

Angered by the production-sharing agreements that Erbil has signed with a string of international oil companies, Baghdad has withheld the bulk of the payments these companies are owed. The dispute has repeatedly led to a stop to exports from the autonomous region. In the first quarter of last year, DNO’s profits dropped to Dh107m after its share of production at Tawke declined by more than a quarter, as exports came to a halt.

DNO was the first foreign company to move into the semi-autonomous region after the second Iraq war, and it has been followed by UAE companies such as Abu Dhabi National Energy (Taqa) and Dana Gas, the Sharjah fuel producer.

A dispute between Iraq’s Kurdish region and Dana Gas over alleged non-payment of revenues has escalated amid a breakdown in trust between both parties. A tribunal was formed this month for Dana Gas’s international arbitration case against the Kurdish regional government.