The Kurdistan regional government (KRG) has agreed to immediately pay $1bn to Dana Gas and its Pearl consortium partners after the two parties mutually agreed to fully settle all their differences amicably by terminating the arbitration and related court proceedings, Dana Gas said August 30.
This brings to conclusion the long-running $2.24bn arbitration process to an end.
The two parties signed heads of agreement on Khor Mor and Chemchemal fields in April 2007. Subsequently a dispute arose between them concerning certain matters under the HoA, and they referred this dispute in October 2013 to an arbitration for decision by a tribunal in London.
Under the present agreement, the KRG will immediately pay Pearl a sum of $600mn. It will also immediately pay Pearl a further $400 million to be dedicated for investment in the gas fields.
Pearl will increase gas production at Khor Mor by 500mn feet3/d, a 160% increase on the current level of production. The additional gas, together with significant additional amounts of condensate, is expected to begin production in approximately two years.
The balance of $1.24bn is no longer a debt owed by the KRG and will be reclassified as outstanding cost recoverable by Pearl from future revenues generated from the HoA areas, Dana said.
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