The company explained that it produced oil for the local market at a reduced price due to the continued closure of a major export pipeline.

DNO recorded an operating loss of $15 million in the second quarter of 2023, compared to a profit of $81 million last year, with its total net production declining to its lowest level in 13 years.

DNO suspended its production in the Kurdistan region of Iraq when Turkey closed an export pipeline in March after a ruling in an arbitration case issued by the International Chamber of Commerce (ICC) in Paris.

The company said on Thursday that the Tawke oil field is now producing 40,000 barrels of oil per day, while the neighboring Peshkabir oil field remains closed.

Iraq asked Turkey to resume oil exports through the pipeline in May after reaching an agreement with the Kurdistan Regional Government (KRG) regarding oil sales and payments, but it is not yet clear when oil exports through the pipeline will be resumed.

DNO indicated that about half of the Tawke field’s production is handed over to the KRG, and the rest is sold to local trading companies and transported by trucks at prices hovering around just over 50 percent of pre-closing levels.

The sales are divided by 75 percent and 35 percent between DNO and its partner, Genel Energy.