KRG Ministry of Natural Resources

24 August 2017

Erbil, Kurdistan Region - Iraq - The Kurdistan Regional Government (Government) has reached definitive binding agreements on the settlement of all historical outstanding receivables owed to DNO ASA, the operator of Tawke Field (DNO), and Genel Energy plc, which has participating interests in both Taq Taq and Tawke.

The following are the highlights of the settlements:

• DNO and Genel shall make no further claims on all historical outstanding Tawke license receivables from the Government;

•  Genel has also agreed settlement of its claims for its share of historical outstanding Taq Taq license receivables from the Government;

• The Government has exercised its audit rights and made provisions to its own satisfaction with respect to the Tawke license for the period up to the 31^st July, 2017 and has no further claims on DNO or Genel;

• The Government has exercised its audit rights and made provisions to its own its satisfaction with respect to Genel’s past entitlements in the Taq Taq license for the period up to the 31^st July, 2017 and has no further claims on payments booked or received by Genel in this regard;

•  The Government has also discharged DNO and Genel from certain payment obligations including production bonuses, license fees, capacity building payments (in the case of Genel) and funding of a water purification project (in the case of DNO); 

• In consideration of these settlements, the government assignedits 20 percent Government Interest in Tawke to DNO, and has removed Genel’s obligation of 30% Capacity Building Bonus payments from the Tawke license;

• In addition, DNO and Genel will receive 3% and 4.5% respectively of gross Tawke license revenues each month from the Government over a five-year period, effective as of 1 August, 2017.

With these adjustments, the Kurdistan Regional Government has no further obligations of past payments of receivable or Petroleum Costs to these two companies with respect to deliveries of oil to the Government. 

The Government is very pleased with the productive and cooperative approach taken by both DNO and Genel in these negotiations, and looks forward to working with them to maximise revenues and to optimise potential reserves of the Tawke and Taq Taq license areas. We believe that this initiative will convey a strong positive message to the investors that the Government is fully committed to a robust win-win partnership with all the International Oil Companies operating in Kurdistan.

DNO ASA and Genel Energy's statements on the settlements can be found on their websites here:

DNO ASA's statement

Genel Energy's statement