DNO shares rise as awaits Iraq deal go-ahead

OSLO: Shares in Norwegian oil group DNO rose sharply Monday as it awaited official confirmation of a deal that would make it possible for it to resume oil exports from Iraq's Kurdish region."We have noted the declarations in the media, but we have not yet received official information from KRG (the government of the Kurdistan Region of Iraq) and we are waiting to receive official information before making a statement," company spokesman Tom Bratlie told AFP.

DNO saw its stock price swell 6.28 percent to 10.95 kroner per share during midday trading on an Oslo stock exchange up 0.61 percent on Monday, the first day of trading since the news broke.In an interview with AFP on Saturday, Iraqi Prime Minister Nouri al-Maliki said Baghdad had agreed to respect profit-sharing contracts that its Kurdistan region has signed with foreign oil firms, ending a longstanding dispute between the two sides."The oil ministry accepted these contracts because the nature of the extraction in Kurdistan is different from Basra," he said, referring to Iraq's oil-rich southern province.

"There is a need for bigger efforts there, while in Basra it (oil) is closer to the surface. It's difficult to have service contracts in Kurdistan but it's normal to have them in southern Iraq," he added.While Kurdistan has signed contracts with international energy companies based on profit-sharing, Baghdad prefers the use of a service fee, whereby firms are paid a fixed sum for each additional barrel of oil they extract.

Kurdistan stopped exporting oil in October 2009 in a dispute with Baghdad over payments to foreign energy companies, and the two sides have been locked in a row ever since.If indeed Baghdad has agreed to respect the Kurdish profit-sharing contracts, it would allow foreign firms like DNO to relaunch their exports of oil extracted there.DNO, which is one of the leading foreign companies authorised to operate in Iraq since the fall of Saddam Hussein, runs the Tawke oil field, where it said last week it had begun pumping oil to an export pipeline to test disused infrastructure.The tested oil volumes so far have amounted to 10,000 barrels per day (bpd), but DNO said it aimed to pump up 50,000 bpd "as quickly as possible," Bratlie reiterated Monday.