DNO to acquire additional stake in Baeshiqa licence in Iraq

Norwegian oil and gas operator DNO is set to acquire an additional stake in the Baeshiqa licence in Iraq’s Kurdistan region as it seeks to enhance operations at the site.

The company will acquire ExxonMobil’s 32% interest in the licence, subject to government approval. The deal will double DNO’s operated stake to 64% with an 80% paying interest.

The move comes more than three years after DNO signed a deal to assume the operatorship of the licence with a 40% paying interest (32% net interest).

DNO executive chairman Bijan Mossavar-Rahmani said: “By increasing our stake in the Baeshiqa licence now, we demonstrate our belief in its ultimate potential.

“Following the stabilisation of oil prices and export payments in Kurdistan, DNO is stepping up spending on new opportunities.”

The 324km² Baeshiqa licence is located around 60km west of Erbil and 20km east of Mosul. It features Baeshiqa and Zartik structures with multiple independent stacked target reservoir systems, including those in the Cretaceous, Jurassic and Triassic.

With a 20% carried interest, TEC (16%) and the Kurdistan regional government are the remaining stakeholders of the licence.

DNO now aims to continue with exploration and appraisal programme on the licence, as well as accelerate early production from existing wells.

The company has already delivered 15,000 barrels of 40º API oil and 22º API oil for export from the Baeshiqa-2 and Zartik-1 wells, demonstrating proof of concept by producing through temporary test facilities.

It estimates gross licence contingent recoverable resources from three tested zones in the two wells range from 12 million barrels of oil (MMbbl) (1C) to 156MMbbl (3C), with a 2C volume of 43MMbbl.