Dragon Oil To Retain Irish HQ

by Amanda Banks, Tax-News.com, London

09 April 2010

Dragon Oil, primarily involved in oil extraction in the Caspian Sea, has announced that it has abandoned plans to relocate its corporate headquarters to Bermuda, for tax purposes, reversing proposals put to shareholders in March 2009.

According to a statement from the company, the announcement follows an extensive review of options available to the company, and a period of shareholder consultation.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer of Dragon Oil, commented:

"The decision not to proceed with the restructuring has been taken after extensive additional review by the Board of the advantages and disadvantages of such a process and has determined that Ireland remains an attractive jurisdiction for the holding company of the Group.”

“Dragon Oil currently has a primary listing on the both the London Stock Exchange and the Irish Stock Exchange. [The Company] meets the UK's highest standards of regulation and corporate governance and, in accordance with recent changes to the UK listing regime, its London Stock Exchange listing has been designated as a premium listing with effect from April 6, 2010."

It is understood that the plan may have fallen foul of the uncertainty over the future treatment of offshore territories by the United States, despite Bermuda's position at the forefront of efforts to create a ‘level-playing field’ in tax transparency; President Obama's 2011 budget included a number of proposed restrictions to discourage businesses and individuals from structuring their affairs using offshore entities and accounts. Some consider that Ireland - with its membership of the European Union - offers a politically assured location amid greater international scrutiny of territories with favourable tax regimes.

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