Bloomberg News

Dragon Oil Says Iran Sanctions May Make Rig Payments ‘Difficult’

February 22, 2012

Feb. 21 (Bloomberg) -- Dragon Oil Plc said tightening international sanctions against Iran may make it “more difficult” for the Dubai-based explorer to make payments for a rig operating in the Caspian Sea.

Dragon is using the Iran-Khazar rig, owned by National Iranian Oil Co., to drill wells off Turkmenistan. The company has “ways to pay for it” without violating the sanctions, said Chief Executive Officer Abdul Jaleel Al Khalifa. He declined to elaborate.

“In future, it might become more difficult, but currently we don’t have any problems,” Tarun Ohri, director of finance, said today in an interview in London.

The U.S. and European Union are imposing wider sanctions to bring pressure on Iran to halt its nuclear program. The U.S. and its allies say the program is a cover for developing atomic weapons, a charge Iran, the second-largest oil producer among the Organization of Petroleum Exporting Countries, has denied, maintaining it is for civilian purposes.

“We can live with the current sanctions rules,” Al Khalifa said today in London. “We are abiding by them and keep monitoring any new sanctions that come through and I don’t think it will hurt our operations. I’ve clarified the use of Iran- Khazar with people of the U.S. consulate in the Emirates.”

Dragon, which is focused on exploration in Turkmenistan, today reiterated its plan to increase production to about 100,000 barrels of oil a day in 2015 from 61,500 a day on average last year.

It’s considering expanding in West Africa after saying last week it was examining plans to bid for BowLeven Plc, a driller working in Cameroon. Dragon has until mid-March to firm up plans and inform the market whether it would bid or not, Ohri said.

The company is also considering a bid for licenses in Iraq with possible partners later this year, Al Khalifa said. He declined to name companies.

Dragon is in the process of relinquishing its last interest in Yemen before exiting the country, the company said today in a statement.

--Editors: Alex Devine, John Viljoen

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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