KRG in Dana Gas suit

Pearl Petroleum part­ners make $26.5bn claim in US

The National - News - Business - - The Region - An­thony McAuley am­cauley@thena­tional.ae

The Kur­dis­tan re­gional govern­ment (KRG) re­jected claims in a law­suit filed by Dana Gas and its ma­jor share­holder, Cres­cent Petroleum, in a US court in a long-run­ning dis­pute be­tween the par­ties over rights to a gas­field in the Kur­dish re­gion of Iraq. “Fol­low­ing the re­cent US court fil­ing by Cres­cent Petroleum and Dana Gas re­gard­ing the ar­bi­tra­tion case with the Kur­dis­tan Re­gional Govern­ment … the KRG will con­tinue vig­or­ously to pur­sue its rights and de­fend its po­si­tion in all ap­pro­pri­ate fo­rums,” the govern­ment said via a state­ment yes­ter­day on the min­istry of nat­u­ral re­sources’ web­site.

The lat­est vol­ley in the dis­pute was fired by Dana Gas and Cres­cent Petroleum, which are part­ners in the Pearl Petroleum con­sor­tium, with the com­pa­nies fil­ing a law­suit in the District Court in the District of Columbia, claim­ing dam­ages up to US$26.5 bil­lion.

The heart of the dis­pute is the com­pa­nies’ con­tention that the KRG wrong­fully pre­vented them from de­vel­op­ing fur­ther the Khor Mor and Chem­chemal reser­voirs un­der an agree­ment struck in 2007.

Dana Gas and Cres­cent have won a se­ries of de­ci­sions in the Lon­don Court of In­ter­na­tional Ar­bi­tra­tion, in­clud­ing a rul­ing con­firm­ing its con­trac­tual rights to ex­clu­sively de­velop the as­sets and ac­tual dam­ages for pay­ment ar­rears to­talling $1.96bn. The com­pa­nies also are seek­ing puni­tive dam­ages of $17bn in that claim. Even when such claims are won, re­cov­er­ing the monies owed is a long and ar­du­ous task, in­volv­ing claims in mul­ti­ple ju­ris­dic­tions.

The US law­suit is an ad­di­tional pres­sure point to try to force the KRG to ne­go­ti­ate a set­tle­ment, which is the op­tion that Pa­trick Allman-Ward, Dana Gas’s chief ex­ec­u­tive, has con­sis­tently said is the pre­ferred op­tion. The com­pa­nies de­clined to com­ment on the US suit.

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