UAE's Dana Gas has boosted its Kurdish hydrocarbons output in the first half of 2022 by 1% despite a flurry of attacks in June and July on its operations in the semi-autonomous region in northern Iraq.
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Register NowTotal Kurdish production reached 34,500 boe/d in the first half of year 2022, up from 34,300 boe/d a year earlier, the company said in its H1 earnings report published Aug. 11.
The 250 MMcf/d expansion project at its Khor Mor field remains suspended, the company said, after it was rocked by rocket attacks in June and July.
Dana Gas, the biggest gas producer in Kurdistan, was planning to increase Khor Mor's production capacity from the current 450 MMcf/d to 700 MMcf/d by the second-quarter 2023.
"Heightened uncertainty in the region and subsequent precautionary security measures have impacted the Khor Mor expansion project," Dana Gas said. "The company and its partners are working closely with the KRG [Kurdistan Regional Government] to address all concerns and all parties remain committed to implementing the expansion project and resume construction activities as soon as possible."
In April 2007, Dana Gas and its parent company Crescent Petroleum, key stakeholders in the Pearl consortium, entered an agreement with the Kurdistan Regional Government for exclusive rights to appraise, develop, produce, market and sell petroleum and gas from the Khor Mor and Chemchemal fields. Other shareholders in the Pearl consortium are OMV, MOL and RWE, holding a 10% stake each.
Rising tensions
The June and July attacks come amid political deadlock in Baghdad over the formation of a new government following the October 2021 parliamentary elections.
Tensions have also risen between Baghdad and Erbil after Iraq's top federal court asked the regional government to hand over its oil operations to Baghdad following its ruling on Feb. 15, when it judged Kurdistan's 2007 oil and gas law unconstitutional.
Although the KRG rejected the ruling, it sent delegations to Baghdad to solve the issue through dialogue, though, with limited progress. Baghdad has been putting legal and diplomatic pressure on oil companies working in Kurdistan amid the dispute with Erbil.
Recently, Kurdistan agreed with the federal agreement in Baghdad to "increase dialogue" to resolve "outstanding issues," including a dispute on their oil and natural gas rights, the prime ministers of both regions said July 23 in a joint statement.