As previously reported DNO Iraq AS (DNOI), a subsidiary of DNO International ASA (DNO) is involved in arbitration proceedings related to certain third party interests in Kurdistan. Such third parties were not approved to be part of nor have any rights in the Production Sharing Contracts (PSC) signed by DNOI following the reviews which were completed in March 2008.
DNOI has rejected the basis for any claims from such third parties, but the first part of the arbitration ruled that the third parties have the right to seek compensation for damages from DNOI.
The arbitration process has now reached a point whereby both parties have filed their submissions regarding damages based on work undertaken be their respective third party experts. The claimants' submission for damages is approximately US $144 million. DNOI has responded that the damages should be at a level of approximately US $12 million.
The arbitration proceedings will now continue with the hearing scheduled for last week of February and a final award with respect to compensation for damages is expected during April or May.
The ongoing arbitration proceedings are confidential as is any award, subject of course to any legal obligation on DNO to disclose or report the final award To meet legal disclosure requirements, DNO has concluded that the parties' submission for damages should be reported through this notification. DNO is however not able to provide any further comments related to the arbitration at this point in time.