The government of Dubai has acquired a 46 per cent shareholding in Dragon Oil, the Irish-registered oil and gas production company, for £24 million sterling (£27 million), or 15p sterling per share. This has triggered a mandatory bid for the outstanding shares. However, with the offer price well below the market price which rose 2p to a mid-price of 20.5p sterling yesterday, this will have little chance of being accepted. Also, Dr Oliver Waldron, joint deputy chairman and chief executive, told The Irish Times that Emirates National Oil Company (ENOC), the company used by the government of Dubai to make the acquisition, was "very happy to keep the share quotation". ENOC also intends to keep Dragon as an Irish-registered company, he added.
The 46 per cent shareholding has been sold by Satellite Overseas, a private company, controlled by Mr Arifin Panigoro, formerly chairman of Dragon. Mr Panigoro has taken a substantial loss on the transaction. He paid around $100 million (£68.54 million) on the original stake and rights issues, so his capital loss is around $60 million (£41 million). Mr Panigoro has been trying to sell the stake for some time because of the conditions in his home country, Indonesia, and the stated intention of Bell Corporation, the Philippine company, to sell its 18.8 per cent stake in Dragon. Bell yesterday said it would not be accepting the ENOC offer.
The overhang of Mr Panigoro's stake has cast a cloud over Dragon. Dr Waldron said: "ENOC's acquisition of this shareholding not only releases Dragon from one of the greatest uncertainties of the past months, but also brings a shareholder with the necessary industry and political relationships to assist in our Caspian developments".
ENOC is chaired by Sheikh Hamdan bin Rashid Al Maktoum, deputy leader of Dubai, and it has substantial interests in refining, the storage of petrochemicals and the marketing of petroleum products. It will take up four of the nine Dragon board seats, including that of chairman. Mr Panigoro and two other directors have resigned. Dr Waldron remains in his present position, Mr Graeme Thomson remains as finance director while Mr Grant Bowler keeps his post of technical director.
Dragon's main interest is a 50 per cent stake in a joint venture on Block 11, offshore Turkmenistan in the Caspian Sea with estimated reserves of 220 million barrels of oil. Last July, Dragon commenced the first oil swap with Iran by an independent company.
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