Genel Energy plc notes that DNO ASA, as operator of the Tawke PSC (Genel 25% working interest), has issued an update on licence activity.
DNO has stated that it remains committed to completing the $100 million Peshkabir-to-Tawke gas capture, transport and reinjection project in Kurdistan to reduce CO2 emissions at the Peshkabir field and boost oil recovery at the Tawke field. Gas reinjection will commence in early April.
Development drilling at the licence has been scaled back, as both DNO and contractor staff movements and rotations have been impacted by border closings, quarantines and other coronavirus travel restrictions.
DNO further stated that its ability to maintain its level of spending has also been strained by interruptions and delays to monthly payments for its oil exports from Kurdistan; the last payment received in January covered September 2019 exports.
By the end of March, the number of active drilling rigs deployed on the Tawke licence will drop to one, from four at the beginning of the year. DNO expects to ramp up operations quickly once the external environment improves.
Production at the Tawke licence in 2020 to date has averaged just over 116,000 bopd.
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 bopd is expected to be impacted.
