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Sun 27 Sep 2009 10:14 PM

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Kurds want full disclosure in DNO shares row - aide

Kurdish authorities say they did not benefit from trading shares in Norwegian oil company.

Iraq's Kurdish authorities did not benefit from trading shares in Norwegian oil company DNO International and are seeking full disclosure of the transactions to help rectify their reputation, a senior aide has said.

"We haven't made any financial gain at all, it's more of a headache for us now," said Khalid Salih, in Oslo to put forward the KRG's position in the dispute, which has been front-page news in Norway over the past week.

The largely autonomous Kurdish Regional Government (KRG) said last Monday it was suspending DNO's operations for up to six weeks and may kick DNO out for good, after the release of details of a 2008 stock deal between the KRG and DNO.

The KRG said the release caused it "unjustifiable and incalculable harm" and accused the Oslo Stock Exchange (OSE) of revealing selective information about the deals that painted the Kurdish authorities in a bad light.

The dispute, which the KRG said it is hopeful of resolving, threatens to taint the regional government's business-friendly image and could deter potential oil investors.

"The Oslo Stock Exchange (OSE) was selective with their information and should have asked us to clarify right from the start, instead of speculating who may be behind the deals," said Salih, who hopes to meet with bourse officials on Monday.

"We want complete disclosure and a fair and transparent process. We need to see it rectify the damage done to us," he told Reuters.

The OSE has repeatedly said it has done nothing wrong.

DNO has threatened to sue the bourse and move its listing to another exchange, an idea welcomed by Salih as part of a solution.

"If DNO wanted to (leave the OSE), we would certainly support them because obviously there is a problem in their relationship with the stock exchange," he said. "As far as KRG is concerned, that would be a very good solution for us."

DNO is due on Monday to give its first news conference since the affair began nearly a week ago.

Some 44 million DNO shares were sold to the KRG and ended up in the hands of privately-held Turkish company Genel Energy, which is in the process of merging with Heritage Oil - a London-listed oil company active in Kurdistan.

"At this stage we are not in a position to say what we will be satisfied with, because we need to understand more. We need to have dialogue with the OSE to see why they have behaved the way they did," said Salih.

At a news conference on Sunday, Salih showed bank documents and e-mails he said proved the KRG did not use its potential knowledge of key regulatory developments for DNO when trading its shares. Norway's financial sector watchdog has asked for an investigation of the transactions by the Norwegian police.

Salih said the KRG bought the DNO shares in October 2008 as a middleman on behalf of Genel to help both firms at a time when financing was tough and they did not have export permits.

"The gains and losses (on the trades) are Genel's," he said. (Reuters)

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