KRG, Pearl Consortium settle disputes

The Kurdistan Regional Government’s, KRG, Ministry of Natural Resources, MNR, and Dana Gas, the Crescent Petroleum Company International Limited, and Pearl Petroleum Company Limited, collectively referred to as the Consortium, have agreed to settle their disputes.

In a joint statement released on Wednesday, the KRG’s MNR and the Consortium announced that they have reached a full and final settlement and have agreed to work on the development of the gas fields in the Kurdistan Region.

The arbitration and related court proceedings have been stopped and all remaining claims between them have been released.

On 4th April, 2007, KRG and the Consortium signed a Heads of Agreement, HoA, on Khor Mor and Chemchemal gas fields.

According to the new agreement, KRG and the Consortium are "proceeding with an immediate further development of the HoA’s world-class resources for mutual benefit as well as the benefit of the people of the Kurdistan Region and all of Iraq."

"The KRG will immediately pay Pearl a sum of USD$600 million," the statement said, adding that it will "also immediately pay Pearl a further $400 million to be dedicated for investment exclusively for the aforesaid further development to substantially increase production."

"Pearl will increase gas production at Khor Mor by 500 million standard cubic feet per day (mmscf/d), a 160 percent increase on the current level of production," the joint statement said.

The KRG is also obligated to purchase 50 percent of the additional gas on agreed terms to boost gas supply to power generation plants in the Kurdistan Region. The other 50 percent of the produced gas (250 mmscf/d) will be marketed and sold by Pearl to customers within Iraq or by export, the statement read.

Ashti Hawrami, Minister of Natural Resources, said that the settlement opens a new chapter in the relationship between the parties and will take the development of the important natural gas sector to new heights.

"The settlement of all debts and restoration of full co-operation gives a positive outlook for further investment and full realisation of the enormous resource potential of the HoA areas," said Majid Jafar, CEO of Crescent Petroleum and Managing Director of the Board of Dana Gas.

Source: Wam