RAK, DNO agree merger

RAK Petroleum has agreed to merge its Middle East and North Africa (MENA) operating subsidiaries into Norwegian independent DNO.

Offshore staff

DUBAI, UAE -- RAK Petroleum has agreed to merge its Middle East and North Africa (MENA) operating subsidiaries into Norwegian independent DNO.

The transaction values the RAK assets in the range $200-300 million. These include gas condensate production from the Bukha field in Oman offshore block 8, the Saleh offshore field re-development in the UAE, and a share of the Gulf of Hammamet concession off Tunisia.

RAK says the transaction will be structured as a merger of two Norwegian subsidiaries of DNO and RAK Petroleum. Definitive agreements will be presented to the shareholders of the two companies for final approval.

“There is a compelling logic in combining the DNO and RAK Petroleum operating assets to build a first rank independent MENA upstream operator,” said Bijan Mossavar-Rahmani, chairman and CEO of RAK Petroleum. Mossavar-Rahmani was also voted in as chairman of the board of DNO at the latter’s annual shareholders’ meeting last month.

Headquarters for the enlarged company will remain in Oslo, Norway, with operations offices in the Kurdistan region of Iraq, Yemen, the United Arab Emirates, Tunisia, and Oman.

On closure of the merger, RAK Petroleum expects to hold a 40% ownership interest in DNO, up from 30% currently.

07/05/2011

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