An exploration well in the Taq Taq oil field located in the Kurdistan Region of Iraq. Credit: Genel Energy plc.

Independent oil firm DNO ASA, the operator of the Tawke field in the Kurdistan region of Iraq, has announced that its producing assets are profitable with oil prices of $30 per barrel.

DNO (75%) and Genel Energy (25%) jointly own the Tawke field. Production began through an early production system in 2017.

According to Genel, the companies have scaled back development drilling at the licence. This comes as border lockdowns and other travel restrictions triggered by the pandemic have affected both DNO and contractor staff movement.

Genel Energy said: “The reduced capital expenditure on the Tawke licence work programme increases Genel’s cash flow generation in 2020 at the prevailing oil price, although will result in a lower exit rate production that impacts 2021.

“Due to this delayed expenditure, Genel’s 2020 net production guidance of close to Q4 2019 levels of 35,410 barrels of oil per day (bopd) is expected to be impacted.”

DNO said that it will continue to follow its strategy of completing the $100m Peshkabir-to-Tawke gas capture, transport and reinjection project to reduce CO2 emissions at the Peshkabir field.

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The company expects gas reinjection to start early next month.

Meanwhile, Genel Energy and DNO have announced investment cutbacks. They seek to cut costs amid a crash in crude oil prices and disruptions from the coronavirus pandemic.

In January 2019, Genel Energy agreed to acquire stakes in the Sarta and Qara Dagh blocks in the Kurdistan region of Iraq from US oil company Chevron.

Genel’s producing fields in the Kurdistan region include Taq Taq and Tawke. Its working interest production in Tawke averaged 33,700bopd in 2018.

Genel Energy has not yet updated investors on the financial results for 2019.