Dana Gas PJSC (DANA), 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.
The proceedings at the London Court of International Arbitration relate to outstanding receivables owed by the Kurdish government, Dana Gas said in a statement to the Abu Dhabi bourse today. The company, along with majority shareholder Crescent Petroleum Co. and subsidiary Pearl Petroleum Co., 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.
Dana Gas, based in the U.A.E. sheikhdom of Sharjah, restructured a $1 billion Islamic bond last year after the Egyptian and Iraqi governments delayed payments for fuel sales. The company said in August it resumed production of liquefied petroleum gas in Kurdistan after an explosion there halted output last year.
Dana Gas started arbitration after the Kurdish Ministry of Natural Resources declined to engage in formal mediation, it said in today’s statement. Shares of the company fell 1.5 percent to 66 fils as of 11:48 a.m. in Abu Dhabi, paring gains in 2013 to 47 percent.
Second-quarter profit at Dana Gas declined 45 percent to 100 million dirhams ($27 million) as revenue fell. Iraq provided 50 percent of the company’s sales in the first half, according to the results. Dana Gas has a 40 percent share of gross production in Iraq, equivalent to 27,000 barrels of oil per day in the quarter.
The company was owed 1.47 billion dirhams from the Kurdish government at the end of June. -Bloomberg