Abu Dhabi National Energy Company, known as Taqa, has filed a claim against its Atrush block partners in Iraqi Kurdistan for failure to meet contractual obligations.
Taqa issued default notices to the local units of Canada’s ShaMaran Petroleum and the American firm Marathon Oil for failure to pay participating interests for the past two months, according to a statement from ShaMaran.
ShaMaran’s unit, General Exploration Partners (GEP), said that the dispute lay with the interpretation of participating interest share.
The company said that GEP “has paid and will continue to pay all cash calls in full accordance with its participating interest”.
A spokeswoman from Marathon confirmed receiving a notice of default and said that it was working to “resolve a commercial issue related to the terms of the joint operating agreement”.
A Taqa spokesman declined to release further details. “As per our company policy, we do not comment on confidential matters related to our partners,” said the spokesman.
The Abu Dhabi company holds a 39.9 per cent share of the Atrush block, GEP holds 20.1 per cent, 15 per cent is held by MOKDV, Marathon’s subsidiary, and the Kurdistan Regional Government owns the remaining 25 per cent. The field, located 85 kilometres north-west of Erbil, is yet to produce “first oil”.
Taqa bought its operating interest in the Atrush oil block for US$600 million from GEP in 2013, and had expected to start production that year. However, the northern, semi autonomous region of Iraq has faced several problems including disputes over drilling rights and international oil sales with the central government in Baghdad and more recently, instability caused by conflict in the country.
Last year, Taqa was forced to suspend its operations at the block and reduce staff size. The company said that despite the disruptions, it remained committed to the development of the Atrush block and expected to start production this year.
Taqa expects that the initial production output of the Atrush block will be about 30,000 barrels of oil equivalent per day (boepd) while a second phase, still subject to approval, could include another 30,000 boepd production facility.
Taqa estimates that the field’s peak production could reach approximately 100,000 boepd. Its shares closed 5.88 per cent higher at 54 fils in Abu Dhabi yesterday.
lgraves@thenational.ae
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