DNO International ASA (DNO.OS) Thursday said an ongoing arbitration process between it and an unnamed third party about certain Kurdish oil assets aren't a part of the suspension period in Kurdistan.

"There has been no formal statement of claim specifying the damages requested in the arbitration to date. During our ongoing discussions with the Kurdish Regional Government, we have understood that the arbitration is not part of the present suspension period in Kurdistan, which DNO is working to resolve as soon as possible," the company said in a statement.

DNO said the proceedings are confidential and won't divulge the identity of the third party whose claims to Kurdish interests it has rejected.

But Norwegian financial daily newspaper Dagens Naeringsliv said the company involved is Ansan Wikfs Investment, owned by Yemeni businessman. Dagens Naeringsliv said Ansan Wikfs is demanding NOK3.1 billion ($533.8 million) in compensation from DNO relating to production sharing contract negotiations in Kurdistan. Repeated requests from Dow Jones Newswires to Abdulhak's company Shaher Trading and Ansan Wikfs about involvement in any dispute over Kurdish assets have gone unanswered.

Earlier this month, KRG suspended DNO's oil operations and exports in Kurdistan on the basis that misleading and incomplete publications by the Oslo Stock Exchange relating to a DNO share sale caused "unjustifiable and incalculable harm" to the KRG. It said at the time that DNO had six weeks to remedy damage done to the KRG's reputation, sort out its internal issues with the stock exchange and "any other disputes that they may have with any other third parties with respect to any claims related to the production-sharing contracts." Market watchers understood that to mean DNO might have to resolve its ongoing arbitration proceedings more quickly.

DNO has oil assets in Yemen, as has Ansan Wikfs, according to its Web site.

Web site: www.dno.no

-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; elizabeth.adams@dowjones.com