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DNO International Restarts West Bukha Production

Source: www.gulfoilandgas.com 9/6/2012, Location: Middle East

DNO International ASA, the Norwegian oil and gas company, announced that it has restarted production from the West Bukha field in Block 8, offshore Sultanate of Oman, at an estimated daily rate of 10,000 barrels of oil and 25 million cubic feet of gas following a five month shutdown required to locate and repair a pipeline blockage. The fast track repair included cutting and replacing a 4.3 kilometer section of the 12-inch pipeline connecting the field to the gathering and export facilities at the nearby Bukha field.

"We are pleased to have the two West Bukha wells flowing again," said Bijan Mossavar-Rahmani, DNO International's Executive Chairman. "Our daily operated production now is approaching 100,000 barrels of oil equivalent from seven fields in three countries, a record level in DNO International's 40-year history," he added.

Bukha field production, also from two wells, was not impacted by the blockage and will continue at an estimated daily rate of 400 barrels of liquids and 10 million cubic feet of gas. A third recently drilled West Bukha development well will be brought on stream this fall following completion and further testing. A fourth West Bukha development well is progressing according to plan and drilling ahead at 4,490 meters. DNO International holds a 50 percent interest in and operates Block 8 containing the West Bukha and Bukha fields and their respective platforms. Korea's LG International holds the remaining 50 percent interest in the block.

Elsewhere, DNO International has completed its obligation to the Kurdistan Regional Government under a protocol to reconcile past accounts and commence application of the fiscal terms and conditions of the existing Production Sharing Contract covering the Tawke license as from 1 June 2012. To meet this obligation, DNO International allocated its share of Tawke production to the government for local consumption during June, July and part of August.

The reconciliation calculation does not include current deliveries to the Iraqi export trunkline that commenced on 7 August and will continue until 15 September, nor volumes exported in 2009, 2011 and 2012 for which payments remain outstanding.

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