Cadogan initiates JV with Iraqi oil service company
19 June 2013
Cadogan Petroleum (CAD LN) granted a loan and is going to receive an option to purchase a stake in OAGSG, the Iraqi oil service company operating in Kurdistan, Cadogan reported on June 18. As a part of the deal, Cadogan agreed to lend to OAGSG up to USD 3 mln for 24 months, fully secured by the borrower’s receivables, at an interest rate of 15%. Parties are negotiating to provide Cadogan an option for a 51% stake in OAGSG within 18 months “at a fair market value”. The deal will help Cadogan to develop its presence in Kurdistan, the company said.
OAGSG’s small website said it provides services for Kurdistan-based oil and gas companies, including drilling, engineering and construction, raw material supplies and logistics services.
Roman Dmytrenko: Such a diversification for Cadogan, a gas exploration and production company, into a new business and a new country looks really confusing, especially taking into account that it reached little success in its core region, Ukraine. We hardly can expect a positive market reaction to this development.
