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More on the Peter Galbraith Kurdish-Oil
Scandal story
14.10.2009
By Reidar Visser
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Translated Text of the DN Article about the Tawke
Oilfield story from Norway’s main business daily
Dagens Næringsliv
October
14, 2009
There have been quite a few requests for
translations of the original Dagens Næringsliv (DN)
article on Peter Galbraith, Porcupine and the Tawke
oil field which was published in the hard-copy
edition of Saturday’s newspaper. Below is a quick
and approximate translation of the meatiest parts of
the story. General background facts about
Galbraith’s past career (including the ongoing
quarrel concerning the Afghanistan election results)
and about DNO’s activities in Kurdistan have been
left out, as have a couple of quotations by yours
truly that have already been paraphrased in English
in the
previous story
on this subject at historiae.org.
One piece of additional background information may
be of interest. The arbitration proceedings
mentioned in the article refer to a claim by
Porcupine (Galbraith’s company) and a Yemenite
multimillionaire,www.ekurd.netboth
of whom were squeezed out when the PSA for the Tawke
oilfield was converted to a new contract by the
Kurdish authorities in early 2008. That was when
Galbraith lost his stake in the oilfield and instead
became party to an arbitration dispute with DNO. The
new relationship is recounted in the annual report
of DNO for 2008 as follows: “Following the review of
DNO’s PSCs in Kurdistan in March 2008, DNO is
involved in arbitration proceedings related to third
party assignments. |
Photo of Peter Galbraith in Bergen from Dagens
Naeringsliv, 10 October 2009. Galbrait, a former State Department Official and
former U.S. ambassador to Croatia. |
A formal award, if any,
may only be completed in 1–2 years. However, DNO
does not consider the claims to be justified and
thereby not likely to become payable. No provision
has thereby been made in the financial accounts for
2008.” In the second quarter report for 2009, there
is a similar reference: “Also as recorded in the
2008 Annual Report, the Company is involved in
arbitration proceedings related to certain third
party interests in Kurdistan. The third party
interests were not approved by the authorities as
part of the PSC review which was completed in March
2008. The first part of the arbitration has ruled
that the third party interests had the right to seek
compensation for damages from DNO Iraq AS. The
arbitration proceedings are therefore continuing and
a final award with respect to possible compensation
for damages is expected in the second quarter of
2010.”
This makes it clear that the relationship between
Galbraith and the Kurdish authorities probably had
soured considerably by early 2008, since it seems it
was the KRG and not DNO that decided to leave his
company out of the revised contract. The fact that
the legal dispute has been ongoing since 2008 should
hopefully also serve to quash the conspiracy theory
already seen in the US blogosphere to the effect
that this whole affair is a concoction by Norway to
support its UN diplomat Kai Eide in his ongoing spat
with Galbraith over the Afghan elections! (That
conflict only became publicly known last month.)
One final remark: The article sometimes refers to
“licenses” and “ownership”. It may possibly be more
precise to speak about a stake in the Tawke PSA from
2004 to 2008 as basis for Galbraith’s claim. Whereas
the oil itself presumably remains in Iraqi ownership
(even the legal framework in force at the time,www.ekurd.netthe
TAL, concedes that much), the stakeholder in this
case probably owns a share (in this case 5 per cent)
of the economic surplus after the deduction of
operating costs.
Senior Diplomat Demands [NOK]
1,500,000,000
[Translated excerpts from the Norwegian version.
Originally researched and written by Kristin
Gyldenskog, Trond Sundnes and Harald Vanvik and
published in Dagens Næringsliv, Oslo, 10 October
2009, pp. 6–8.]
In secret, senior diplomat Peter Galbraith has
economic interests in a Kurdish oilfield. Galbraith,
who was recently sacked by the UN in Afghanistan,
through his Porcupine company demands more than NOK
1,500,000,000 [approximately USD 250,000,000] from
DNO for losing his oil licenses in Iraq [...]
“I cannot comment on this because I want to avoid
legal complications”, Galbraith said. He ran away
when DN journalists tried to get in touch with him
in Bergen on Thursday [...]
On 29 June 2004, DNO signed an exploration deal for
a territory within the Kurdish areas of northern
Iraq. DNO was the first Western company to enter
into an agreement with the Kurdish regional
authorities. Whereas other international oil
companies chose to liaise with the central
government in Baghdad, DNO secured rights to the
proceeds of 40 per cent of future oil discoveries in
the Tawke field. DNO failed to reply to queries from
DN yesterday. When the deal was signed, Kurdish
authorities retained rights to a substantial part of
the oilfield. However, five per cent went to
Galbraith.
The day after DNO had signed the deal with the Kurds
in 2004, Peter Galbraith founded the Porcupine
company in Delaware. Delaware-based businesses are
protected by a high level of confidentiality. DN has
identified documents relating to the foundation of
Porcupine signed by Peter W. Galbraith and dated 30
June 2004. Porcupine is one of the parties involved
in the lawsuit currently pending in London [relating
to the marginalisation of the Porcupine company in
2008 by the Kurdish authorities as described in the
introduction above]. DN is also in possession of
documents from December 2006 showing that
Galbraith’s company still held a five-percent
ownership share at that point.
“This dog is very aggressive”, Galbraith said when
DN journalists confronted him in Bergen early
Thursday morning […] DN have made repeated attempts
to obtain comments from Galbraith on his involvement
in Porcupine. When he saw DN’s photographer and
journalists he first ran away. Later he replied to a
few questions after having been confronted with
company documents showing he is the manager of
Porcupine. “It is well known that I have worked for
companies that invest in Iraq. I have pledged to
maintain confidentiality concerning these
relationships and cannot provide any more
information”, Galbraith told us.
“What did you do in Iraq between 2004 and 2006?”
“You should have read my book, The End of Iraq.
Everything is explained there”, Galbraith said,
walking briskly. When he noticed DN’s photographer
he started to run.
Later in the day, Galbraith contacted us. “I don’t
want to be difficult. But I was surprised that you
brought a photographer along. Actually, I thought
things worked out well; I needed some exercise
anyway. I have been thinking about your questions. I
should have been able to provide answers to you.”
Galbraith said he had advised the Kurds for many
years, but never in a capacity as a formal adviser.
“I have worked with companies investing in Iraq and
of course the Kurdish authorities know about my
relationships to my clients. That is all I want to
say”, Galbraith commented.
“What is your relationship to Porcupine?”
“I am in a situation where my business undertakings
are subject to confidentiality agreements. I tried
to get in touch with my lawyers to find out what
information I might be able to provide to you
without breaching my pledges of confidentiality, but
I couldn’t reach them”, Galbraith said [...]
DN agreed with Galbraith to call him again later
yesterday. However, when we did so, Galbraith said
he did not want to make any further comment and hung
up while we tried to ask him questions. “Go ahead
and write whatever you want to write. This is your
story. Good bye”, Galbraith said.
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