RAK Petroleum profits double

Northern Emirates oil producer doubles annual profits after sharpening its focus.

RAK Petroleum's production last year averaged 9,250 barrels per day of oil and liquids.

RAK Petroleum profits nearly doubled last year, helped by rising oil prices and a tighter operational focus.

The closely held Ras al Khaimah oil and gas producer posted net earnings of Dh56.3 million (US$15.3m), up from Dh29.5m in 2009, its first profitable year.

"During 2010, the company again posted record production and operating results while continuing to sharpen its focus," said Bijan Mossavar-Rahmani, the chairman and chief executive.

"The existing portfolio of exploration and production assets was high-graded, additional non-core financial holdings were divested and the company's cash holdings were further deployed towards strategic oil and gas investment."

A notable transaction last year was RAK Petroleum's purchase of an additional 20 per cent of the Norwegian oil producer DNO International, bringing its holding in the company to 30 per cent. DNO is one of two companies pumping oil in Iraqi Kurdistan. It also has oil operations in Yemen.

"I expect our strategic investment in DNO International will realise significant value for our shareholders," said Mr Mossavar-Rahmani, who joined RAK Petroleum in 2008 after previously heading the international arm of the US oil producer Apache.

The company's production last year averaged 9,250 barrels a day of oil and liquids and 31.2 million cubic feet of gas, mostly from Oman.

The company said it planned to drill three wells this year in the Bukha and West Bukha gasfields off Oman's Musandam Peninsula with its partner, LG International of South Korea.

RAK Petroleum has also made a discovery, probably gas, onshore in Oman, although it is not yet known whether the deposit is large enough to exploit commercially.

"The recently drilled exploration well in Oman Block 47 to a depth of 3,885 metres confirmed the presence of a reservoir bearing hydrocarbons," Mr Mossavar-Rahmani said. "Additional tests are needed to evaluate the quality, size and commercial potential of this reservoir."

In the UAE, RAK Petroleum plans to continue work to redevelop the previously abandoned Saleh gasfield off Ras al Khaimah.