Dana Gas says Kurdish Regional Government risks sanctions after missing $100m payment deadline
Dana Gas is putting further pressure on the Kurdish Regional Government of Iraq after Erbil failed to honour an order by a London court to pay US$100 million in back payments.
In the latest move in the long-running dispute, Dana said that the deadline for payment had passed in a second order by the London Court of International Arbitration.
It had earlier ordered the KRG to make the payment within 30 days of its ruling, or by November 17.
Now the Sharjah-based energy company has warned the KRG that its failure to pay up risks sanctions being levied against it.
Sharjah-based Dana has been in dispute with the KRG since 2009 over some $700 million worth of payments owed to the company.
The company said that it and its partners in the Pearl Petroleum consortium are also continuing to pursue multibillion dollar claims in arbitration against the KRG for breach of contractual commitments.
Such claims will be determined in a final liability hearing scheduled to take place the week of April 20, 2015.
Dana owns 40 per cent in the consortium, with another 40 per cent held by its Crescent Petroleum, the largest shareholder in Dana.
Austria’s OMV and Hungary’s MOL each hold a 10 per cent stake.
Despite such legal manoeuvres, Dana reiterated its commitment to its contract with the KRG.
“Dana Gas and its consortium partners reiterate their continued commitment to the contract, the Kurdistan region and all of Iraq, and sincerely hope that all outstanding contractual matters with the KRG be resolved, amicably and in good faith in the shortest possible time, within the contractual framework,” the company said in its statement.
“This will in turn enable the full and proper development of the Khor Mor and Chemchemal fields as envisaged by the Contract, for the benefit of the people of the Kurdistan region and all of Iraq.”
In addition to its woes in the Kurdish region, Dana is also chasing receivables in Egypt its other main field of operation. The company is still owed $276m in payments, of which $160m is overdue since 2011.
Dana last month reported net earnings of $38m in the three months to the end of September, up $10m on the same quarter last year, on revenue $4m higher at $174m. Total production – mainly from its gas assets in the Nile Delta in Egypt and the Khor Mor gasfield in Kurdish Iraq – was 3 per cent higher at 68,700 barrels of oil equivalent per day.
Dana’s shares – listed on the Abu Dhabi Securities Exchange – fell by 2.04 per cent on Monday, closing the day at 48 fils.
The company’s shares have lost more than 47 per cent of their value since the start of the year.
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Published: December 15, 2014 04:00 AM