Norwegian oil and gas operator DNO has doubled its stake in the Baeshiqa licence in the Kurdistan region of Iraq by acquiring ExxonMobil’s 32% stake.

The financial terms of the deal were not disclosed.

The company has now increased its stake in the onshore Iraqi block to 64% (80% paying interest). The acquisition is subject to government approval, said the company.

DNO executive chairman Bijan Mossavar-Rahmani said: “By increasing our stake in the Baeshiqa license now, we demonstrate our belief in its ultimate potential.

“Following the stabilization of oil prices and export payments in Kurdistan, DNO is stepping up spending on new opportunities.”

The company said that it will look to continue an exploration and appraisal programme on the Baeshiqa licence, while speeding up early production from existing wells this year.

Through temporary test facilities, the company produced 15,000 barrels of 40º API oil from the Baeshiqa-2 well and 22º API oil from the Zartik-1 well.

DNO announced making hydrocarbons discovery on the Baeshiqa license in late 2019, through the drilling of the Baeshiqa-2 well.

In mid-2020, the company completed testing and appraisal of the exploration well. At that time, DNO also announced plans to spud the Zartik-1 exploration well on the Zartik prospect, located 15km southeast of the Baeshiqa-2 well in the same license.

Currently, the Norwegian oil and gas company estimates gross licence contingent recoverable resources from the two wells to be in the range of 12 million barrels of oil (mmbbls) (1C) and 156mmbbls (3C), with a 2C volume of 43mmbbls. The estimates are from three of the tested zones in the two wells.

DNO forayed into the Baeshiqa licence by acquiring a 32% stake from ExxonMobil besides taking over as its operator in 2018.

The Norwegian firm’s partners following the exit of ExxonMobil will continue to be Turkish Energy Company (TEC), which holds a 16% stake, and the Kurdistan government (20%).

Spread over 324km2, the Baeshiqa licence is located 60km west of Erbil and 20km east of Mosul.