UAE’s Dana Gas Says Wins Right To Some Payments From Iraqi Kurdistan

Dana Gas, one of the largest oil and gas investors in Iraq’s semi-autonomous Kurdish region, said on Sunday that an arbitration tribunal had awarded it the right to receive some outstanding payments from the Kurdish government.

The Abu Dhabi-listed firm, which leads a consortium of investors, had filed an arbitration case in London last October against the Kurdistan Regional Government (KRG), seeking to confirm its contract rights and to obtain payments for products which it had delivered.

“The companies have been successful in their application to the Tribunal for interim measures,” Dana Gas said in a statement on Sunday.

“The Tribunal has made an order dated 10th July 2014 for the KRG to restore the previous regular payments to the companies as of 21st March 2014, the date of the application, and until the case is concluded.”

It was not immediately possible to obtain comment from the KRG.

Dana Gas said in February that it had not received any significant payments from the KRG since July 2013, and was pushing for payments to resume as soon as possible. A tribunal at the London Court of International Arbitration was set up to hear the case.

“In addition to the Tribunal’s order for payments to resume, the Tribunal has also confirmed its jurisdiction to decide the case,” Dana said.

To date the Pearl consortium, which consists of Dana, Crescent Petroleum of the United Arab Emirates, Austria’s OMV , and Hungarian oil and gas group MOL, has invested over $1.1 billion in Iraqi Kurdistan, according to the statement.

Dana, which holds 40 per cent of the consortium, has said it collected $69 million from the KRG in early 2013 but the flow of funds then dried up, leaving a trade receivables balance owed to Dana alone of $515 million at the end of last year – up from $354 million at the end of 2012.

Previous earnings statements for Dana Gas suggest regular payments to the consortium as a whole, if they are resumed, could total roughly $30 million per month.

The Kurdish region’s untapped oil reserves, lucrative production-sharing contracts and safe environment compared with the rest of Iraq have prompted international oil companies to commit to investing billions of dollars in blocks there.

ExxonMobil Corp, Chevron Corp and Total SA have entered Kurdistan even at the risk of losing contracts in the south. Baghdad deems contracts between foreign oil companies and the KRG to be illegal.