The UAE's RAK Petroleum has become a significant shareholder of a Norwegian company pumping oil in Iraqi Kurdistan, but an offer to double its stake has been rebuffed. RAK, a privately owned oil and gas company based in Ras al Khaimah, said yesterday it had informed the board of DNO International that is was interested in purchasing the company's treasury shares at "a meaningful premium" to the current market price. The proposed transaction would boost RAK's interest in DNO to about 10 per cent, expanding its assets beyond the UAE and Oman.
But DNO said it had rejected the approach. At the same time, it disclosed that RAK's holding in DNO had surpassed 5 per cent on Monday, after a purchase of 8,000 DNO shares on the open market. "The board appreciates the interest shown in the company," DNO said, but added that its did not plan to sell any treasury shares as its capital position was "satisfactory". Treasury shares are stock that the issuing company has bought back for retirement or resale. According to a statement to the Oslo bourse, DNO holds about 50 million of them, compared with more than 900 million shares outstanding.
This is not the first time that RAK has attempted to spread its wings in the MENA region by buying into another junior oil company's operations. In 2007, it made a takeover offer for Gulf Keystone, a Bermuda-registered oil minnow that at the time was exploring for gas in Algeria. The deal was cancelled when the Algerian government demanded a hefty approval fee. Shortly thereafter, Gulf Keystone switched its focus from Algeria to Kurdistan, where it recently made a large oil discovery.
In April, RAK successfully acquired Omani oil and gas licenses from two British companies, Indago Petroleum and Heritage Oil. Heritage has also struck oil in Kurdistan, and is in the process of merging with Turkey's Genel Enerji, which, together with DNO and China's Sinopec, is one of three companies already pumping crude in the region. tcarlisle@thenational.ae
