The Norwegian oil company DNO, the main producer of crude oil in the Iraqi Kurdistan Region, has said that it may join the agreement that allows it to to export Kurdish oil Kurdish oil through the pipeline connecting to the Turkish port of Ceyhan. The company, which has so far stayed out of the tripartite pact between Iraq, the Kurdistan Regional Government (KRG) and eight international companies, is considering a change of course in its business strategy.
The pipeline carrying crude oil from northern Iraq to Turkey was suspended for more than 2 years following an international legal dispute. In September 2025, Iraq and the KRG signed an agreement to resume the flow, with the backing of state-owned trader SOMO, the entity in charge of centralizing exports. The resumption of operations represents a key move to stabilize Iraq’s energy revenues.
Why did DNO not sign initially?
Despite the importance of the pact, DNO refused to sign it at its launch, opting to sell its production locally at considerably lower prices, around US$30 per barrel. The decision raised doubts among analysts about the viability of sustaining such a strategy over time. The company has confirmed that it has the right to join the agreement at any time.
According to statements by Bijan Mossavar-Rahmani, CEO of DNO, the company is evaluating whether to join the existing agreement or negotiate a bilateral agreement with SOMO, without going through the tripartite framework.
Production projections and medium-term vision
DNO has resumed drilling operations drilling operations at its Tawke and Peshkabir at its Tawke and Peshkabir fields, aiming to raise gross production to 100,000 barrels per day from 70,000 barrels per day in 2025. Its net production sold locally reached 18,000 barrels per day during the last fiscal year. By entering the export scheme, the oil company seeks to improve its margins by accessing more competitive international prices.
DNO, between market pressure and strategic opportunity
The evolving Iraqi political context will also be key. Mossavar-Rahmani warned that reaching an agreement could take until mid-2026, depending on how the formation of the new federal government progresses after elections held in November 2025.
With a dominant position in Kurdistan and the regional infrastructure back in operation, DNO faces a critical decision that could redefine its position on the Middle East energy map. If the company decides to rejoin the export system, it could significantly influence the stability of the local market and the distribution of revenues between Baghdad and Erbil.
Source: Reuters
Photo: Shutterstock