RAK Petroleum takes control of DNO International's board
RAK Petroleum has gained control of the board of its affiliate DNO International.
Bijan Mossavar-Rahmani, the chairman and chief executive of RAK, said his election as the chairman of DNO would improve prospects for the troubled Norwegian firm to secure a profitable long-term contract for exporting oil from Iraqi Kurdistan. "We believe we would be a stronger voice at the table in promoting and pursuing the interests of DNO," Mr Mossavar-Rahmani told Reuters. "This is not about the management, or the Arabs coming in, or a merger," he added. "This is about a 30 per cent shareholder taking a larger role in the board of the company and its direction."
RAK is a private company and its output consists of gas and liquids from a few small deposits off the coasts of Oman and Ras al Khaimah. But it has large international ambitions it hopes to realise through its association with DNO.
In 2003, the Norwegian company was the first to enter the semi-autonomous Kurdish region of Iraq and to sign a production-sharing contract with the Kurdistan regional government. After discovering the 140 million barrel Tawke oilfield in 2006, DNO became one of only two foreign companies producing and exporting Kurdish oil. But it has struggled to get paid for its exports.
Baghdad has declared the contracts "illegal", while the Kurdish government claims they are in line with the country's constitution. "The expectation is that [DNO's] contract will be honoured," Mr Mossavar-Rahmani said.
Published: June 12, 2011 04:00 AM