Dragon Oil launches procurement probe

Dragon Oil has begun to investigate its procurement procedures after identifying problems during an internal audit review that may have involved former senior managers in its marketing and contracts departments.

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 28 -- Dragon Oil PLC has begun to investigate its procurement procedures after identifying problems during an internal audit review that may have involved former senior managers in its marketing and contracts departments.

The company is working with its internal audit department and KPMG to resolve the matter and is taking legal advice.

"The relevant authorities have been informed or are in the process of being informed of the investigation," said Dragon Oil.

It has delayed publishing its preliminary results for 2008 because of the investigation, and an update will be given to shareholders before the end of March, the company said.

Abdul Jaleel Al Khalifa, chief executive officer, said: "This matter is completely unacceptable. Having identified the possibility of these irregularities, the board is moving swiftly to investigate the possible irregularities and will take actions to ensure that purchasing procedures are operating properly and that appropriate actions are taken."

He added that initial results suggested that the matter will not have a material impact on the company's financial position.

Dragon Oil's asset is the Cheleken contract area in the Caspian Sea, off Turkmenistan. Dzheitune and Dzhygalybeg oil and gas fields lie in water 8-42 m deep.

Contact Uchenna Izundu at uchennai@pennwell.com.

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