The company (Det Norske Oljeselskap, DNO) said it still wasn't sure how much oil it had found, or whether its exploration well was operational.
DNO sent a statement to the Oslo Stock Exchange, however, saying that its data showed oil in five areas of its Tawke 1 well in the Kurdish area of Northern Iraq.
DNO said it was now studying the possibilities for oil production in the Tawke area. If tests are successful, production could start in the first quarter of 2007, company officials said.
A drilling rig now placed at the Tawke 1 well will be moved to another site, Tawke 2, for more drilling. It lies two kilometres west of the well where DNO has found oil.
DNO said it planned to drill to a depth of 2,000 meters. DNO also said it has signed a contract to take delivery of another rig from Greatwall Drilling Co Ltd.
DNO held a press conference on its discovery at the site, which was attended by members of the government from Baghdad, including deputy oil minister Motasam Akram.
/NTB