KRG in Dana Gas suit
Pearl Petroleum partners make $26.5bn claim in US
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.