DNO to Pay Damages and Costs up to $92m

Reuters reports that Norwegian oil company DNO said it had resolved a long dispute over former U.S. diplomat Peter Galbraith’s middle-man role in a 2004 Iraqi oil deal by paying damages and legal costs as high as $92 million.

That compares to the $55 to $75 million in damages DNO estimated last October it would have to pay Galbraith and a Yemeni firm in an arbitration over money from an oil field in Iraqi Kurdistan that the former diplomat helped line up for DNO.

The claimants have been identified as Peter Galbraith, son of famous economist John Kenneth Galbraith, and the company owned by the family of (Yemeni businessman) Shaher Abdulhak.

Galbraith, a former U.S. Senate staffer who championed Kurdish rights and later held U.S. and United Nations diplomatic posts, has denied a conflict of interest, saying he was a private citizen when he helped DNO gain Kurdish oil licenses.

In its annual report released on Friday DNO said it had set aside about $65 million in 2010 to cover liability and legal costs in the case and an additional $27 million in 2009.

“The arbitration case has now been settled outside of the arbitration process, with no additional material effect to the financial statements for 2010 or future accounts,” it said.

DNO spokesman Tom Bratlie declined to discuss the dispute beyond saying it dated back several years to when the Kurdish regional government barred “third parties” from continuing to own stakes in DNO licenses obtained after the U.S.-led invasion to topple Saddam Hussein.

One such regional license — which Iraq’s central government seeks to revise — covers the Tawke field, where DNO now produces about 50,000 barrels of crude a day.

Bratlie said the arbitration winners have now been paid their damages. He said settlement terms kept him from specifying how much each got or what share of the total went to lawyers.

(Source: Reuters)

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