By John Lee.
Genel Energy has announced that a British court has dismissed its claim for damages from the Kurdistan Regional Government (KRG) for loss of Genel's rights to develop the Bina Bawi and Miran fields in Iraqi Kurdistan.
In a statement made after the close of trading in London on Monday, the company said that the tribunal has ruled that the KRG validly terminated the Bina Bawi and Miran production sharing contracts and that GEMMBL's [Genel Energy Miran Bina Bawi Limited] counterclaim is dismissed.
Expressing his disappointment at the decision, Genel's Chairman David McManus said the company will update the market "once we have appropriately analysed the Tribunal's Award."
The KRG's Ministry of Natural Resources informed Genel of its intention to terminate the Bina Bawi and Miran production sharing contracts (PSCs) in August 2021.
Full statement from Genel Energy:
Update on arbitration regarding the Bina Bawi and Miran PSCs /
Arbitration Award made in favour of Kurdistan Regional Government
Genel Energy plc ('Genel') announces that it has today received a copy of the award (the 'Award') in respect of the London Court of International Arbitration claim brought by the Kurdistan Regional Government ('KRG') in December 2021 against the Genel subsidiary, Genel Energy Miran Bina Bawi Limited ('GEMBBL').
The claim, commenced by the KRG in 2021, sought a declaration that the KRG had the contractual right to terminate both the Bina Bawi production sharing contract and the Miran production sharing contract. Subsequently, the Genel Board concluded that it was left with no practical alternative but to accept that in its view both the Bina Bawi and Miran production sharing contracts were terminated as a consequence of the KRG's repudiatory breaches and to submit a counterclaim for damages from the KRG for loss of Genel's rights to develop the Bina Bawi and Miran fields.
The Tribunal has ruled that the KRG validly terminated the Bina Bawi and Miran production sharing contracts and that GEMMBL's counterclaim is dismissed. The Tribunal also reserved for determination in a future award(s) the allocation of the costs relating to the arbitration.
Genel's Chairman David McManus commented:
"We are very disappointed that the Tribunal found against GEMBBL in this arbitration. We will update the market once we have appropriately analysed the Tribunal's Award.
"We remain of the view that we were left with no option but to seek to defend our rights in this arbitration. Our internal team and external advisors have worked diligently since the case was commenced by the KRG in December 2021 and we thank our team for all that work."
(Source: Genel Energy)
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