Khalilzad nominated to DNO board, the Norwegian firm that
produces oil in Iraq's Kurdistan region
does not take credit for and is not responsible for the
content of news information on this page
Khalilzad nominated to DNO board, the
Norwegian firm that produces oil in Iraq's Kurdistan
OSLO, — The
former U.S. ambassador to Iraq, Zalmay Khalilzad, is
slated to join the board of directors of DNO, the
Norwegian wildcat firm that produces oil in Iraq's
Kurdistan region. Khalilzad’s presence brings new
clout – and the potential for controversy – to the
Kurdistan Regional Government’s efforts to win
Baghdad’s support of its disputed oil contracts with
companies like DNO.
Khalilzad has been nominated to the DNO board by RAK
Petroleum, an independent but politically connected
firm based in the United Arab Emirates with Emirati
and Saudi shareholders, which owns 30 percent of DNO.
Khalilzad is an RAK board member.
He and RAK Group Commercial Director Shelly Watson
are the sole nominees for two seats on the DNO board
that will be voted on at the company's June 17
annual meeting, according to DNO shareholders and
documents published by the companies.
Former US ambassador to Iraq, Afghanistan and the UN
Khalilzad was U.S.
ambassador to Iraq from June 2005 to March 2007, and
then went on to serve as ambassador to the United
Nations for the remainder of the Bush
administration. He was also ambassador to
Afghanistan from 2003 to 2005.
The oil firm has three concessions in Iraq's
Kurdistan region, and also operates in the North
Sea, Yemen, Mozambique and Equatorial Guinea.
DNO’s work in Iraq has already stoked controversy.
Last year it was made public that Peter Galbraith, a
former U.S. ambassador to Croatia and adviser to
Iraq's Kurds on constitutional issues and its battle
with the central government on autonomy, was an
early investor in DNO's Kurdish contracts.
Galbraith, who has long supported Kurdish autonomy,
is currently in a legal dispute with DNO alleging
his company, Porcupine LP, is owed compensation
after it was squeezed out of the deal.
Galbraith’s business activities appeared to
complicate – and some would say, compromise – his
role as a disinterested advisor to the Kurds. His
attempted investment in Kurdistan’s oil sector
caused many observers to see an ulterior, financial
motive in his past advocacy for the region’s ability
to sign such deals. Galbraith denied any conflict of
The debate over federalism has been a major fault
line in the political landscape, as Iraq has
struggled to form a cohesive democracy – and DNO was
one of the first companies to wedge itself into the
gap between the KRG and Baghdad, signing a contract
with the Kurdistan region, in 2004.
Baghdad maintains it has the sole rights to strike
oil deals, especially with foreign companies. In
defiance, the KRG has signed more than two dozen
contracts with a variety of firms to explore for and
develop oil in the three semi-autonomous northern
provinces of Iraq. The Oil Ministry has responded by
blacklisting any companies who signed with the KRG
from purchasing Iraqi crude or participating in any
federal oil deals.
The dispute has also held up broad political
reconciliation over questions of regional autonomy
and stalled four oil-related laws that would
establish a framework for managing the oil sector
and distributing revenue.
DNO's Tawke field, which is the most developed of
any of the KRG's oil prospects, briefly began
exporting last summer via Iraq's northern export
pipeline. After three months,www.ekurd.nethowever,
the KRG halted those exports in the midst of a
dispute over payments. The KRG claimed that,
according to the Tawke contract, it was Baghdad who
should compensate the contractors. Baghdad refused.
The Oil Ministry has insisted that the KRG, as
signatory to the contract, must pay from the 17
percent of national revenue it receives in the
annual budget. A technical agreement was reached
earlier this year that would restart exports if past
costs incurred by the contractors were paid, but so
far the legal, fiscal and technical mechanisms to do
this have not been initiated by the central
Khalilzad’s presence adds clout to the DNO and KRG
side of the debate. He brings a wealth of experience
– and a stable of high-profile contacts – from his
ambassadorships to Iraq, Afghanistan, and the United
Nations. The highest office holders in Iraq and
Afghanistan still seek his counsel.
The U.S. embassy has said that Khalilzad now
operates solely as a private citizen – a line it has
maintained ever since the former ambassador formed
Khalilzad Associates, a consulting firm whose
activities include prospecting for business
opportunities in Iraq.
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