The Common Ills: DNO v. KRG

Wednesday, September 23, 2009

DNO v. KRG

DNO International ASA's suspension from producing oil in Iraq highlights the risks for explorers seeking to tap the world's third-largest reserves.
The Kurdistan regional government shut down operations at Oslo-based DNO, the first foreign company to pump crude in Iraq since the 1970s, for as many as six weeks after its role in a share transaction was disclosed by the Oslo exchange amid an investigation of the deal. The government said on Sept. 21 that DNO must act to repair the damage to its reputation after it was fined by the bourse for a delay in providing information.
The DNO dispute "raises some concerns on investments in the region," said Al Stanton, an RBC Capital Markets analyst with a "sector perform" rating on the company. "It has again highlighted the uncertainty associated with the fiscal and legal terms and that is a worry for us."

The above is from Marianne Stigset and Anthony DiPaola's "Kurdistan Oil Spat with DNO Signals New Risk to Iraq Projects" (Bloomberg News) which now tops Dow Jones as the most in-depth piece on the issue thus far. Andrew Ward (Financial Times of London) refers to DNO "battling to save its investment" and notes that DNO shares have been "suspended until at least tomorrow". Meanwhile Reuters explains DNO is considering filing a lawsuit against OSE (Oslo Stock Exchange) "for what it saw as a 'wilful breach of confidentiality' that had a serious impact on its operations." Monday, the Kurdistan Regional Government published [PDF format warning] a letter online outlining the steps they were taking in the dispute:

1) Suspend all DNO's operation and its involvement in the Kurdistan Region with immediate effect, and appoint the other PSC [Production Sharing Contract] Contractor Entities to manage the day to day operations instead. All oil exports will cease and DNO shall not be entitled to any economic interest in the PSCs during the suspension period.

2) The suspension period shall be for a maxium period of 6 weeks, and during which DNO must find ways to remedy, and to our full satisfaction, the damage done to KRG reputation, and once and for all to sort its internal problems with OSE and any other disputes that they may have with any other third parties with respect to any claims related to the PSCs ("Claims").

3) If within this suspension period, DNO satisifes KRG's requirements; all its PSC rights will be reinstated with our continuous support to its operations. However, if DNO fails to remedy the damages caused and fails to remove any other Claims the KRG may consider termination of DNO's involvement in the Kurdistan Region with or without compensation. Any compensation, if offered, will factor in the magnitude of the damages caused to the KRG.

Meanwhile, Alexandra Sandels (Los Angeles Times) reports three men were arrested in Kirkuk for attempting to sell antiquities for $160,000 with a fourth still at large: "The undercover operation took two weeks to prepare and was executed based on information from local residents. Gen. al-Zaidi said that 'chasing terrorists' is not the Iraqi army's 'only duty' these days. Art thieves need to be put behind bars too."

Elsewhere, Gary Younge doles out realities in pieces. This is from the Guardian:

Despite his stimulus bill, unemployment is still rising; the troops are still in Iraq; Afghanistan is getting worse. His healthcare reform risks following a similar pattern – an improvement on the status quo that too many people believe is also inadequate. One can argue about how fair these perceptions are and whether they will change in time (he's only been in office for eight months). But once they are set they can be difficult to shift and politics isn't about what's fair.

For those late to the party, here's how it works. Writing in The Nation, Gary Younge must cheerlead the Democratic Party and, despite being a British citizen, must act like the biggest flag waver in the US. In the Guardian, he can float itty-bitty questions and nagging thoughts from the back of the brain. When writing for any of the UK's many Socialist publications, he can actually be honest. Someone call Joanne Woodward, they've remade The Three Faces of Eve and Gary's assumed her Academy Award winning role.

And what a performance it was. Only readers of the Socialist publications learned the truth about Barack in 2008. For The Nation, Gary would accuse Hillary of this or that, claim Barack had overwhelming Latino support (Hillary had overwhelming Latino support) and basically present as truth any campaign spin Katrina ordered him too. For the Guardian, he'd offered these little fleeting thoughts.

It's a tour de force performance and I nominate it for Best Attempt By The Nation Magazine To Convince The American People That There Are No Socialists In The World. Truly amazing on Gary's part and truly pathetic on the part of The Nation. (But, hey, if they had to be honest, it would mean they'd have to admit that basically Eric Alterman is the only Democrat that writes for their magazine.)

At some point, a political scientist is going to seriously address the damage that political closets have done to the left. We're now aware of how limiting sexual closets are, we know that they block off creativity and invention. We know that those hiding in them make the closet the be all and end all and it becomes the focus of their entire lives. At some point, a poli sci or theorist is going to explore how much damage the political closets have done to this country. Remember that for over seventy years now, no US outlet has done more to insist that there are no Socialist or Communists than The Nation -- consider it the homophobic parent in extreme denial who would rather their child live a lie than be happy.

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