DNO ASA, the Norwegian oil producer focused on northern Iraq, fell for a second day after Islamist insurgents seized several cities south of the Kurdistan region where it operates.
While no violence has been reported in the semi-autonomous region, the Oslo-based company fell as much as 5.7% and traded 0.5% lower at 22.19 kroner a share as of 2:01 p.m., extending losses to 6.4% over the last two days.
“When the unrest is at this level and terror groups are involved, the stock will never thrive,” analyst Teodor Sveen Nilsen of Swedbank First Securities said in a phone interview. “The unrest is 150 kilometers from DNO’s Tawke field and might as such not have a big impact, but investors have a lot of others stocks to choose from and will react negatively when faced with uncertainty.”
Militants
DNO, the first foreign oil company to drill in Iraq after the U.S.-led invasion in 2003, got almost 80% of its production from the Kurdish region of the country’s north in the first quarter. The area is situated north of Mosul, Iraq’s second-biggest city, which was seized by militants of the Islamic State in Iraq and the Levant this week.
The violence has raised the prospect of a resurgence of sectarian conflict in Iraq, the second-biggest producer of the Organization of Petroleum Exporting Countries, as Prime Minister Nouri al-Maliki’s Shiite-led government struggles to control Sunni-majority regions.
DNO spokesman Henrik Schwabe couldn’t immediately comment, he said in an email.
Swedbank downgraded DNO to neutral from buy on “increased political risk,” it said in a note yesterday, June 11. “It’s escalated more than I had thought,” Sveen Nilsen said today.
Providing useful reviews, articles and writings on crude oil, energy and gas. Crude oil brokerage services crude oil facilitator services Oil Brokering oil facilitators global oil broker global oil facilitator crude oil brokers at LinkedIn Twitter crude oil brokers Twitter oil facilitators online.
No comments:
Post a Comment