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The ripples of the KRG’s “disputes” with
DNO & OSE raises questions
29.9.2009
By Harem Karem and
Dheyaa Al-Murabi
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September 29, 2009
(ekurd.net), — The ripples
of the (Kurdistan Regional Government) KRG’s
“disputes” with DNO & OSE are growing wider & wider.
Indeed following the unusually nervous reactions of
Mr Ashti Hawrami the minister of natural resources
and the KRG itself threaten to have more serious and
far-reaching consequences.
The predicament started in recent days when the Oslo
Stock Exchange (OSE) published information on last
October sale of DNO treasury shares. DNO said it
strongly objected to the SOE’s decision prompted by
a freedom of information act.
Analysts said it was unusual for governments to act
as a mediator in a fund-raising exercise for a
private company on the other hand Khalid Salih, a
senior to the Kurdish government’s prime minister,
said the government decided to assist DNO in the
capital raising process in order to help the company
complete its work in preparation for exporting
crude, “we did not want DNO to delay because of
their cash needs” Salih Said.
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Harem Karem
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The same argument was voiced by
the KRG which added that “neither the KRG nor any of
its ministers, official employees or advisors has
benefited directly or indirectly, through DNO or
Genel Enerji,www.ekurd.netfrom
the transaction of subsequent resale of the shares
referred to by SOE”
Before proceeding any
further we have to raise the following questions;
(1) The KRG’s
anger is not against the transaction, but against
making it public. If the publication of this
transaction is embarrassing and “shameful” to the
KRG and causing “unjustifiable and incalculable”
harm to the government’s reputation, why did it go
through it? Is there any person in the world, to say
nothing about a responsible constitutional
government to spend millions of dollars for
something when bring no benefits at all? To say
nothing about incalculable harm.
(2) The official
statement said that the KRG’s purchase of the DNO
shares was prompted by the desire to “rescue” from
its difficulties in Oct 08 to enable it to carry out
the export of oil without delay. Here two question
arise;
(A) The
export operations in question started on the 1st of
June 2009, 8 months after the distress which the A/M
Company might have gone through during the global
financial and economic crunch. During this period
many companies have recovered, so it could not be
the real excuse, besides, the export was made
through the national pipeline network entailing no
additional coasts to DNO.
(B) If a
company falls under the impact of the crunch, which
was not unusual at that time, then it is up to the
financial and economic authorities of its country to
provide it with the necessary bail-out. In this case
the Norwegian authorities are quite capable of doing
this in the most efficient and effective manner.
Suffice it to say that the Norwegian national oil
company “Statohydro” has reserves of £240 billion
(the financial time 29 Aug 09) besides all
governments of developed and emerging economies
initiated gigantic bail-out for their distressed
companies – some companies,www.ekurd.nethowever,
could not shoulder the staggering burdens facing
them and subsequently yielded to acquisition bids
from other corporations (e.g Fiat & Chrysler,
siwopec & Adax, Kraft/ Cadbury etc).
(3) One of the
main arguments to justify the KRG’s option for the
production sharing agreements (PSA’s) in developing
the oilfields in Kurdistan was that this was the
only incentive to attract large investments in the
region. Needless to say that unnecessary financial
privileges were surrendered to the companies. If the
latter have no capital to continue their operations,
that are then their merits to justify the heavy
price paid to them? If it were for their technical
know-how, then this could be acquired through
technical service contracts (TSC’s) and that is what
the KRG should do, but not, it wants the OSE to
remedy the situation, by finding some way to cover
up the scandal. No wonder that Mr Salih suggested
that DNO be listed on another bourse as a
satisfactory way out!!
(4)
Constitutionally the KRG is not allowed to hold
shares of a foreign company operating on its
territories – how can it act as the “employer” and
that “contractor” at the same time? On which side
will it stand in the case of a dispute? Furthermore,
the matter here involves the whole Iraqi people to
whom the oil wealth belongs. Have the elected
representatives been consulted, or at least informed
of this act? These are but preliminary remarks when
may be followed by greater details.
By Harem Karem and Dheyaa Al-Murabi
Harem Karem, freelance writer
and
a regular contributing writer for ekurd.net website.
You may reach the author via email at: harem2000
(at) hotmail.com
Copyright © 2009 ekurd.net. All rights reserved
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