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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2017
51
33.
RELATED PARTY TRANSACTIONS
Related parties comprise major shareholders, directors and executive officers of the Group, their families and companies
of which they are the principal owners. Balances and transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not disclosed in this note.
The related party transactions and balances included in the Group’s consolidated financial statements are as follows:
a) Compensation of key management personnel:
Key management personnel are considered to be the Board of Directors of the Company.
The remuneration of key management personnel during the year was as follows:
Year ended
2017
Year ended
2016
US$ 000’s
US$ 000’s
Salaries and other short-term benefits
2,186
1,428
Post-employment benefits
950
30
Share based payments
93
93
3,229
1,551
b) Agreement to purchase shares
Mohamad Al Howqal, SVP- HSSE (formerly the Deputy CEO) of the Group has entered into an agreement with a third
party on behalf of the Group to purchase a specified number of shares of the Company held by that third party.
Depending on the outcome of certain future events, and unless otherwise agreed, the Group may be required to lend
Mr Al Howqal the purchase price of the shares, until such time as Mr Al Howqal is able to sell those shares to third party
or the Company (subject to shareholder approval) and repay the loan to the Company.
During 2017-15, under the arrangement described above, Mr Al Howqal was obliged to purchase 1,612,901 ordinary
shares of the Company with assistance of US$3.3 million loan from the Company (see note 17). Mr Al Howqal will likely
be obliged to purchase additional 2,419,359 shares of the Company which again would require the Group to lend Mr Al
Howqal US$ 5.4 million (2016: US$ 6.2 million).
34.
SUBSEQUENT EVENTS
a)
In February 2018, the Group entered into a farm-out agreement with Dragon Oil (a wholly owned subsidiary of
Emirates National Oil Company Limited, the national company of Dubai), a partner in the Iraq Block 9 field, to assign
a 15% participating interest in the Iraq Block 9 exploration, development and production service contract. Under the
terms of the agreement, 6.43% participating interest in Block 9 will be assigned to Dragon Oil in settlement of a
dispute with Dragon Oil in relation to non-controlling interest in the Block 9 (see note 13) and 8.57% participating
interest in Block 9 will be assigned to Dragon Oil for a cash consideration of US$100 million. This agreement, which
is subject to the Iraqi government and partner approval, will materially improve the Group’s liquidity position. Post
completion of the farm-out transaction, the Group will remain operator and retain a 45% participating interest in
Block 9.
b)
In March 2018, the Group has received an irrevocable notice of conversion from Qatar First Bank holding 50% of the
convertible loan principal, to convert the principal and part of the premium amount outstanding into ordinary shares
of the Company under terms of the convertible Murabaha.