KRG Ministry of Natural Resources

19 September 2009 

Statement by Dr Khaled Salih 
Senior Adviser to the Prime Minister and the Minister of Natural Resources 
Kurdistan Regional Government 

The Kurdistan Regional Government (KRG) issues the following comments in response to the documents released by the Oslo Stock Exchange (OSE) yesterday, 18th September. The OSE’s documents referred to the treasury shares transaction of October 2008 by the Norwegian oil company DNO, which has an oil production sharing contract in the Kurdistan Region. 

1. The KRG has facilitated the treasury shares transaction with the sole intention of helping DNO to raise the capital required for its projects in the Kurdistan Region. We wish to make it absolutely clear that neither the KRG nor any of its ministries, officials, employees or advisers has benefited directly or indirectly, through DNO or Genel Enerji, from the transaction or subsequent resale of the shares referred to by OSE. 

2. The KRG had agreed a prepayment/cash advance loan to Genel Enerji, but it was more convenient for the KRG to arrange payments for the shares directly instead of first sending the money to Genel Enerji in another country. 

3. Dr Ashti Hawrami, the KRG Natural Resources Minister, has always acted in his official capacity as minister, and not on a personal basis as it would appear to have been irresponsibly implied in some of the information released by OSE and some subsequent commentators. 

4. Whilst we realise that it is not for us to comment on DNO’s reporting requirements to OSE, we find it astonishing that OSE released such perceived market sensitive information without any attempt to seek clarification from us. 

5. It is well known that investors have always viewed positively news on actual or implied commercial relationships between the companies working in the Kurdistan Region and the KRG. The release of this information and the way it was released pushed up DNO’s share price on Friday, for no real commercial reason. We believe that the OSE should have been careful of this outcome, rather than unwittingly and through its internal battles with DNO contributing to this unworthy speculation. 

6. In conclusion, the KRG has always been and shall continue to be supportive of the companies working in the Kurdistan Region. We are very appreciative in particular of the dedication of DNO and Genel Enerji, which have both invested significantly in the Region. The KRG last week agreed to increase the share of Genel Enerji payments with respect to any local oil sales, and will do the same for DNO in due course.