Genel Energy PLC on Wednesday said that DNO ASA, the operator of the Tawke and Peshkabir oil fields in the Kurdistan region of Iraq, has started an orderly shutdown amid an ongoing dispute between Iraq and Turkey.

The oil company with exploration and production operations in northern Iraq said the fields on average produced 107,000 barrels of oil per day in 2022. It added that the production from Taq Taq continued to flow into storage, with capacity for around three weeks.

The shutdown comes days after Genel Energy reported that Turkey closed the Iraq-Turkey pipeline after the International Chamber of Commerce in Paris ruled in favour of Baghdad in an arbitration case against Iraq’s autonomous Kurdistan region.

The arbitration tribunal of the ICC had accepted Baghdad’s claims in a dispute with Ankara over who had responsibility for exporting the oil from Iraq’s autonomous Kurdistan region, where both Gulf Keystone Petroleum Ltd and Genel operate.

Iraq in 2014 launched the proceedings against neighbouring Turkey, claiming exclusive rights over Kurdistan’s oil exports.

But in defiance of Baghdad, the regional government in Arbil continued to export oil through Turkey at a rate of around 450,000 barrels a day.

Iraq’s oil ministry said that the Paris arbitration tribunal had ruled that Baghdad’s State Oil Marketing Organization ‘is the only entity authorised to manage exports’.

The Kurdistan government sees Baghdad as trying to profit from the region’s resources, while the Iraqi government argues it should enjoy sovereign control over all of the country’s oil production.

Genel Energy shares were 2.5% lower at 115.00 pence each in London on Wednesday morning.

Copyright 2023 Alliance News Ltd. All Rights Reserved.