Abu Dhabi –Dana Gas expects to see additional revenues in the second half of 2018 after the first phase of expansion operations in the Kurdistan Regional Government (KRG) of Iraq are completed, the company’s head of investor relations Mohammmed Mubaideen told Mubasher.
On 30 August 2017, an alliance led by Pearl Petroleum, in which Dana Gas owns a 35% stake, reached a settlement with the KRG to settle all differences once and for all.
The deal included a repayment of $2.2 billion from the KRG to the alliance as per the an arbitrary tribunal.
Around $1 billion were paid immediately, while $600 million were distributed across the alliance’s companies, with Dana’s stake amounting to $210 million, and $400 million were allocated to investments for developing the Khor Mor and Chemchemal fields and increase output.
The settlement also gave Pearl Petroleum exploration and development rights in two sectors in the KRG, namely sectors 19 and 20, Mubaideen revealed, indicating that the settlement had also entailed amendments to the production-sharing agreement, which would result in major financial gains for Dana Gas and its associates.
Under the new deal, the production-sharing agreement would be extended to 2049, while the alliance’s output, after covering all expenses, will reach 22% compared to 10% in the previous deal.
As per the previous deal, the KRG received the produced gas for free, while Dana Gas and its partners achieved their revenues by selling liquid petroleum gas (LPG) and condensates, the top official noted.
He said that under the new deal, the KRG will only receive 300 million cubic feet of gas free of charge.
Last week, Mubaideen told Mubasher that Dana Gas’ operational activities would not be affected by its $6 million exposure to The Abraaj Group, describing the impact as being “very limited.”
Translated by: Nada Adel Sobhi