DNO shares rally as Kurdistan resumes oil exports
Shares of Norwegian oil group DNO International ASA rallied as much as 22% on Monday after the Kurdistan regional government in Northern Iraq said it's ready to immediately restart oil exports.
Kurdistan's minister for natural resources, Ashti Hawrami, said that oil exports from the region's fields will be restarted at a rate of no fewer than 100,000 barrels per day, according to a statement issued Sunday.
The government will also work to rapidly increase production to more than 200,000 barrels per day this year, Hawrami also said in the statement. Within five years, oil production in Kurdistan will increase to 1 million barrels a day, the government estimates.
DNO published on Monday the Kurdistan government's statement on its Web site, saying that at present it "cannot offer any further information or comments on this matter."
o ensure transparency, Kurdistan's regional government has also published the contracts for exploration and production signed with DNO and Genel Enerji A.S., a company registered in Turkey and owned by industrial conglomerate Cukurova Group.
"Although there are different views on the level of the profit share to be allocated to the contractors, the reality obliges us all to agree on the resumption of the oil export and to allocate a certain percentage of the revenue from the exported oil to the concerned contracted companies, to cover their actual costs," Hawrami said.
The minister also said his government is ready to form a financial committee to verify the exact amounts of money that DNO and Genel have invested in the region to date. The committee will consist of representatives from Iraq's federal government, Kurdistan's regional government and the two companies.
A separate committee also needs to be created to confirm the amount of oil produced and exported by the companies as well as the revenue that the State Oil Marketing Organization of Iraq has received from these exports, according to Hawrami.
Shares of DNO /quotes/comstock/29r!dno (NO:DNO 5.75, -0.16, -2.62%) rose 15% in recent trading on the Oslo Stock Exchange. They have surged 44% over the last three months.
Full story: http://www.marketwatch.com/story/dno-shares-rally-as-kurdistan-resumes-oil-exports-2010-01-18?reflink=MW_news_stmp
