Dana Gas seeks $26.5B damages

dubai — Dana Gas and its partners are seeking damages of at least $26.5 billion from Iraq’s self-governing Kurdish region for delays in oil and natural gas projects, a US court filing shows. The company’s shares gained the most in more than three months.

UAE-based Dana Gas and its partners in the venture, called Pearl Petroleum, filed a petition on May 12 in a federal court in Washington, D.C., seeking “recognition and enforcement” of awards in a London arbitration case, according to the US court documents. The petition is part of a legal process that may allow Pearl Petroleum to seize Kurdish assets if the Kurds don’t pay awards decided in arbitration.

The Kurdistan Regional Government “considers that the claimants’ approach in the arbitration is unconstructive and unnecessarily escalates the dispute,” its energy ministry said on Wednesday in a statement posted on its website. “The KRG will continue vigorously to pursue its rights and defend its position in all appropriate fora,” the ministry said on Tuesday in an e-mailed statement.

The partners are pursuing claims in the London Court of International Arbitration against the KRG for damages for delays they say were caused by the KRG in developing the projects. Dana Gas hasn’t previously disclosed the amount of damages it’s seeking in the case. The shares jumped 5.1 per cent, the most since February 14, after climbing the most in more than a year in intraday trading. The company has lost about a quarter of its market value in the past six months, to Dh2.9 billion.

Dana Gas, which is developing the Khor Mor and Chemchemal fields in northern Iraq through Pearl Petroleum, produces most of its oil and gas in Iraq and Egypt. Unpaid receivables from both countries have hurt the producer’s ability to invest and repay creditors.

The company, which had about $298 million of cash on hand at the end of March, is seeking to renegotiate terms on about $700 million in Islamic bonds due in October.