More on the Galbraith Story: Translated Text of the DN Article about the Tawke Oilfield
Posted by Reidar Visser on Monday, 12 October 2009 20:53
There have been quite a few requests for translations of the original Dagens Næringsliv (DN) article on Peter Galbraith, Porcupine and the Tawke oil field which was published in the hard-copy edition of Saturday’s newspaper. Below is a quick and approximate translation of the meatiest parts of the story. General background facts about Galbraith’s past career (including the ongoing quarrel concerning the Afghanistan election results) and about DNO’s activities in Kurdistan have been left out, as have a couple of quotations by yours truly that have already been paraphrased in English in the previous story on this subject at historiae.org.
One piece of additional background information may be of interest. The arbitration proceedings mentioned in the article refer to a claim by Porcupine (Galbraith’s company) and a Yemenite multimillionaire, both of whom were squeezed out when the PSA for the Tawke oilfield was converted to a new contract by the Kurdish authorities in early 2008. That was when Galbraith lost his stake in the oilfield and instead became party to an arbitration dispute with DNO. The new relationship is recounted in the annual report of DNO for 2008 as follows: “Following the review of DNO’s PSCs in Kurdistan in March 2008, DNO is involved in arbitration proceedings related to third party assignments. A formal award, if any, may only be completed in 1–2 years. However, DNO does not consider the claims to be justified and thereby not likely to become payable. No provision has thereby been made in the financial accounts for 2008.” In the second quarter report for 2009, there is a similar reference: “Also as recorded in the 2008 Annual Report, the Company is involved in arbitration proceedings related to certain third party interests in Kurdistan. The third party interests were not approved by the authorities as part of the PSC review which was completed in March 2008. The first part of the arbitration has ruled that the third party interests had the right to seek compensation for damages from DNO Iraq AS. The arbitration proceedings are therefore continuing and a final award with respect to possible compensation for damages is expected in the second quarter of 2010.”
This makes it clear that the relationship between Galbraith and the Kurdish authorities probably had soured considerably by early 2008, since it seems it was the KRG and not DNO that decided to leave his company out of the revised contract. The fact that the legal dispute has been ongoing since 2008 should hopefully also serve to quash the conspiracy theory already seen in the US blogosphere to the effect that this whole affair is a concoction by Norway to support its UN diplomat Kai Eide in his ongoing spat with Galbraith over the Afghan elections! (That conflict only became publicly known last month.)
One final remark: The article sometimes refers to “licenses” and “ownership”. It may possibly be more precise to speak about a stake in the Tawke PSA from 2004 to 2008 as basis for Galbraith’s claim. Whereas the oil itself presumably remains in Iraqi ownership (even the legal framework in force at the time, the TAL, concedes that much), the stakeholder in this case probably owns a share (in this case 5 per cent) of the economic surplus after the deduction of operating costs.
Senior Diplomat Demands [NOK] 1,500,000,000
[Translated excerpts from the Norwegian version. Originally researched and written by Kristin Gyldenskog, Trond Sundnes and Harald Vanvik and published in Dagens Næringsliv, Oslo, 10 October 2009, pp. 6–8.]
In secret, senior diplomat Peter Galbraith has economic interests in a Kurdish oilfield. Galbraith, who was recently sacked by the UN in Afghanistan, through his Porcupine company demands more than NOK 1,500,000,000 [approximately USD 250,000,000] from DNO for losing his oil licenses in Iraq [...]
“I cannot comment on this because I want to avoid legal complications”, Galbraith said. He ran away when DN journalists tried to get in touch with him in Bergen on Thursday [...]
On 29 June 2004, DNO signed an exploration deal for a territory within the Kurdish areas of northern Iraq. DNO was the first Western company to enter into an agreement with the Kurdish regional authorities. Whereas other international oil companies chose to liaise with the central government in Baghdad, DNO secured rights to the proceeds of 40 per cent of future oil discoveries in the Tawke field. DNO failed to reply to queries from DN yesterday. When the deal was signed, Kurdish authorities retained rights to a substantial part of the oilfield. However, five per cent went to Galbraith.
The day after DNO had signed the deal with the Kurds in 2004, Peter Galbraith founded the Porcupine company in Delaware. Delaware-based businesses are protected by a high level of confidentiality. DN has identified documents relating to the foundation of Porcupine signed by Peter W. Galbraith and dated 30 June 2004. Porcupine is one of the parties involved in the lawsuit currently pending in London [relating to the marginalisation of the Porcupine company in 2008 by the Kurdish authorities as described in the introduction above]. DN is also in possession of documents from December 2006 showing that Galbraith’s company still held a five-percent ownership share at that point.
“This dog is very aggressive”, Galbraith said when DN journalists confronted him in Bergen early Thursday morning […] DN have made repeated attempts to obtain comments from Galbraith on his involvement in Porcupine. When he saw DN’s photographer and journalists he first ran away. Later he replied to a few questions after having been confronted with company documents showing he is the manager of Porcupine. “It is well known that I have worked for companies that invest in Iraq. I have pledged to maintain confidentiality concerning these relationships and cannot provide any more information”, Galbraith told us.
“What did you do in Iraq between 2004 and 2006?”
“You should have read my book, The End of Iraq. Everything is explained there”, Galbraith said, walking briskly. When he noticed DN’s photographer he started to run.
Later in the day, Galbraith contacted us. “I don’t want to be difficult. But I was surprised that you brought a photographer along. Actually, I thought things worked out well; I needed some exercise anyway. I have been thinking about your questions. I should have been able to provide answers to you.”
Galbraith said he had advised the Kurds for many years, but never in a capacity as a formal adviser. “I have worked with companies investing in Iraq and of course the Kurdish authorities know about my relationships to my clients. That is all I want to say”, Galbraith commented.
“What is your relationship to Porcupine?”
“I am in a situation where my business undertakings are subject to confidentiality agreements. I tried to get in touch with my lawyers to find out what information I might be able to provide to you without breaching my pledges of confidentiality, but I couldn’t reach them”, Galbraith said [...]
DN agreed with Galbraith to call him again later yesterday. However, when we did so, Galbraith said he did not want to make any further comment and hung up while we tried to ask him questions. “Go ahead and write whatever you want to write. This is your story. Good bye”, Galbraith said.
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