By Matthew Gayle.
According to Iraq Oil Report, the consortium managing the only producing natural gas field in Iraq's autonomous Kurdistan region is taking the Kurdistan Regional Government (KRG) to court, alleging overdue payments that are likely to total over $2 billion.
Dana Gas, a United Arab Emirates fuel producer, began arbitration proceedings in London on rights and money owed from an oil development contract it signed with the Kurdistan regional government of Iraq in 2007, according to Bloomberg.
The dispute threatens to send an uncharacteristically chilling signal to foreign companies that have generally lauded the KRG's Ministry of Natural Resources (MNR) for creating a welcoming climate for investors.
Bloomberg is also reporting that the company, along with its majority shareholder Crescent Petroleum and subsidiary Pearl Petroleum, also filed the case to clarify the group’s development and marketing rights of the Khor Mor and Chemchemal fields in Kurdistan, according to the statement.
The KRG has called the claim "misleading", adding:
"Despite previous requests from the KRG, Dana Gas has refused to withdraw or correct misleading and inaccurate statements that have been drawn to its attention by the KRG. In these circumstances, the KRG is compelled to correct the record.
"There are no “outstanding receivables” owed by the KRG to Dana or Dana’s affiliates. It is Dana and its affiliates that owe the KRG significant sums.
"The KRG has incurred very large losses as a result of the misrepresentations of Dana Gas and the failure by Dana Gas to meet the commitments and promises it made to the KRG. These include losses resulting from Dana Gas’s significant delay in delivering an LPG plant to the Kurdistan Region contrary to the representations and commitments that Dana Gas made to the KRG."
(Source: Iraq Oil Report, Bloomberg)