By John Lee.
DNO International, the Norwegian oil and gas company, announced today that it has reached agreement with the Kurdistan Regional Government (KRG) to fully apply the fiscal terms and conditions of the existing Production Sharing Contract (PSC) covering the Tawke license moving forward, replacing temporary arrangements in place since start of operations.
The agreement also provides for a reconciliation of past accounts and application of contract fiscal terms from inception until 1 June 2012. As a result of this reconciliation, DNO International's share of Tawke oil sales over a period of about eight weeks will be allocated to the KRG for local consumption but the Company expects that its overall revenues for the year will remain unchanged.
The reconciliation calculations do not include payments not yet received for exports through the Iraqi pipeline system in 2009 and again in 2011-12. When those payments are made, DNO International will receive its pro rata share as provided for under the PSC.
Bijan Mossavar-Rahmani (pictured), DNO International's Executive Chairman, commented:
"We are very pleased with this outcome and the overall trend towards normalisation. The previous ad hoc arrangements put in place by the KRG provided us tremendous support during difficult and uncertain periods and allowed us to continue our investment programs.
"But now that we are firmly established, our shareholders benefit from greater clarity and transparency as to the status of the Tawke project and our other investments in the Kurdistan Region of Iraq."