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Norway's DNO won't use newly opened pipeline to Kurdistan in Iraq

DNO, a Norwegian company, said that it has no immediate plans of shipping oil via the Iraq-Turkey pipe, which is set to resume after a suspension of two years. Instead, DNO will continue to supply directly to Iraq's semiautonomous Kurdistan region. On Thursday, two Iraqi officials from the oil ministry said that the pipeline linking Iraq's Kurdistan to Turkey would resume its operations on Saturday after a tripartite deal between the federal government and the Kurdistan Regional Government. DNO, which is the largest international oil company in the KRG and did not sign the agreement because it wanted to know more about how the outstanding debts will be paid. DNO's shares dropped 1.9% on the Oslo Stock Exchange shortly after opening.

In a press release, Executive Chairman Bijan Mossavar Rahmani stated that "DNO is delighted that the exports of crude oil from Kurdistan Region will now flow into international markets."

He added, "We have chosen not to directly engage in exports for the time being and will continue to offer our oil to our customers on a cash-and carry basis, monthly, at a price per barrel in the low 30s USD."

DNO is the operator of the Tawke license, which includes Tawke and Peshkabir. It holds 75% of the license, while its partner Genel Energy owns the remaining 25%.

DNO reported that DNO and Genel would be left with 30,000 barrels per day of oil after they deliver 38,000 bpd for exports to the Kurdistan Regional Government.

Even though DNO hasn't signed the tripartite accord, its buyers can still ship their oil through the export pipe.

"We understand that our buyers have made their own arrangements for placing oil purchased from us in the export pipeline. This is a step we welcome, as it supports the greater export project," Mossavar Rahmani added. (Reporting and editing by Barbara Lewis; reporting by Nerijus Adomiaitis)

(source: Reuters)