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Shares of Norway's DNO rise as Kurdistan restarts

[eventtrader]

FRANKFURT (MarketWatch) -- Shares of Norwegian oil group DNOInternational ASA rallied as much as 22% on Monday after the Kurdistanregional government in Northern Iraq said it's ready to immediatelyrestart oil exports.

Kurdistan's minister for natural resources, Ashti Hawrami, said thatoil exports from the region's fields will be restarted at a rate of nofewer than 100,000 barrels per day, according to a statement issuedSunday.

The government will also work to rapidly increase production to morethan 200,000 barrels per day this year, Hawrami also said in thestatement. Within five years, oil production in Kurdistan will increaseto 1 million barrels a day, the government estimates.

DNO published on Monday the Kurdistan government's statement on its Website, saying that at present it "cannot offer any further informationor comments on this matter."

To ensure transparency, Kurdistan's regional government has alsopublished the contracts for exploration and production signed with DNOand Genel Enerji A.S., a company registered in Turkey and owned byindustrial conglomerate Cukurova Group.

"Although there are different views on the level of the profit share tobe allocated to the contractors, the reality obliges us all to agree onthe resumption of the oil export and to allocate a certain percentageof the revenue from the exported oil to the concerned contractedcompanies, to cover their actual costs," Hawrami said.

The minister also said his government is ready to form a financialcommittee to verify the exact amounts of money that DNO and Genel haveinvested in the region to date. The committee will consist ofrepresentatives from Iraq's federal government, Kurdistan's regionalgovernment and the two companies.

A separate committee also needs to be created to confirm the amount ofoil produced and exported by the companies as well as the revenue thatthe State Oil Marketing Organization of Iraq has received from theseexports, according to Hawrami.

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