Norwegian oil and gas operator DNO has cancelled a planned expansion project at the Tawke oil field in Iraq, according to industry sources.

The Tawke Field Production Facility Expansion aimed to increase production capacity at the field to 200,000 barrels a day (b/d) and would have included the construction of a central processing facility (CPF) to as well as a thermal power plant and associated facilities.

“The new CPF is no longer needed as production won’t rise in line with initial expectations,” said one source.

A contract for the front-end engineering design work on the project was awarded to ILF Consulting Engineers in 2014.

The main engineering, procurement and construction contract was estimated to be worth between $200m and $500m, but the project saw several delays and an invitation to bid for the contract was never issued.

Genel Energy owns 25 per cent of the Tawke licence.

The Tawke oil field has seen a significant decline in production over recent years.

Production has dropped from around 133,000 b/d in 2014 to 110,000 b/d in 2017.

In its half-year interim results, which were published on 24 August, DNO says that two drilling rigs are currently operating at the Tawke field and the 2017 production programme for the asset includes 10 production wells.

The company says the new Tawke wells will “help stabilise field production at around 110,000 b/d.”

Both DNO and Genel Energy reached agreed settlement deals with the Kurdistan Regional Government (KRG) in August.

As part of its deal, DNO accepted a further 20 per cent stake in the Tawke field that was previously owned by the KRG. This increased its stake to 75 per cent.