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KRG suspends DNO oil contracts

Sept. 22, 2009 at 12:07 PM   |   Comments

ERBIL, Iraq, Sept. 22 (UPI) -- The Kurdistan Regional Government in Iraq suspended its contracts with Norwegian oil company DNO citing "unjustifiable" harm to its reputation.

A document issued Friday by the Oslo Stock Exchange implies KRG Natural Resources Minister Ashti Hawrami was involved as a benefactor in the sale of DNO shares to Turkey's Genel Enerji in October.

The KRG denies the allegations. In a sharply worded letter to the directors at DNO, Hawrami said the KRG decided to suspend oil contracts with DNO for six weeks to give the Norwegian company time to remedy the damage done to the KRG's reputation.

Hawrami said the KRG assessment of the OSE publication found "that unjustifiable and incalculable harm has been caused to the reputation of the KRG."

DNO is its latest financial reports said its exports sales from the Tawke oil field in Iraqi Kurdistan, which began in June, contributed $21 million to its revenue.

Delivery rates at the Tawke oil field in the second quarter reached 50,000 barrels per day with 45,000 bpd reserved for exports.

DNO in response to the KRG decision said it was "highly critical" of the OSE and the "serious consequences" the publication caused.

"DNO is now considering initiating legal actions against OSE for damages as a result of willful breach of confidentiality," the company said. "The claim for damages may be substantial."

© 2009 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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