RAK Petroleum has reported an 80 per cent drop in first-quarter net profit, in part reflecting a loss by its Norwegian affiliate DNO International.
The privately held Ras al Khaimah oil and gas producer posted net income of Dh5.9 million (US$1.6m) on Dh63m of revenue for the first three months of this year, down from Dh30.5m net profit for the same period a year ago.
Without a share of the 65.4m Norwegian krone (Dh43.1m) first-quarter net loss by DNO, in which it holds a 30 per cent interest, RAK Petroleum's first-quarter profit would have fallen 38 per cent to Dh19m.
"During the first quarter, RAK Petroleum posted continued positive operating results and steady production averaging 9,000 barrels of oil and condensate, and 33 million cubic feet of gas per day, while making preparations to drill four new wells, deepen an existing well and fracture and test still another well," said Bijan Mossavar-Rahmani, the chairman and chief executive of the company.
"Our strategic investment in DNO International will provide significant value for our shareholders over time."
DNO produces oil and gas in Iraqi Kurdistan and Yemen. The company restarted exports from the Tawke oilfield in Kurdistan this February, but is still awaits payment from Baghdad for the crude.
Its Yemen operations have been hampered by the unrest in the country, including a sabotage attack that shut down a crucial gas pipeline.
In its first-quarter report, DNO said it had received confirmation from the Kurdistan regional government that $110m would be released to the company in partial payment for its output from Tawke.
The announcement is significant because it heralds a thawing in relations between Baghdad and the Kurds, and signals the two governments are working towards a resolution of their long-standing dispute over Kurdish oil and gas contracts.
RAK Petroleum's drilling programme, which is scheduled to begin next month and run until the end of next summer, will focus on gas prospects in Oman and off Ras al Khaimah.