Pearl Petroleum seeking billions in damages

ERBIL, May 31, 2017 – The Pearl Petroleum joint venture has started legal proceedings against the Kurdistan Regional Government (KRG) in the US in an effort to bolster its pursuit of arbitration awards.

The UAE’s Dana Gas and Crescent Petroleum, alongside European partners OMV, MOL an RWE Trading & Supply on May 12 filed a petition with a federal court in Washington DC, media reported on Wednesday, for “recognition and enforcement” of awards by the London arbitration court in 2015 related to delayed payments on the part of the KRG.

The developers of the Khor Mor and Chemchemal gas assets in the Kurdistan Region of Iraq expect to learn the amount of the London case in September. According to the May US 12 court filings, Pearl Petroleum is seeking damages to the tune of USD 26.5 billion.

The new legal process could result in the partners being permitted to seize assets in Northern Iraq in the event of non-payment on the part of the KRG.

The KRG’s Ministry of Natural Resources was quick to respond, saying on Tuesday that the government would “continue vigorously to pursue its rights and defend its position in all appropriate fora.” It also referred to the KRG’s previous statement.

So, too, did the KRG Council of Ministers on Wednesday, saying that Dana Gas has a history of quoting “selectively from the tribunal’s partial awards.” It further stated that “some of the same misinformation still continues to be circulated within the media.”

The council concluded by lamenting Dana Gas’ approach, labelling it “unconstructive.”

In other news, the Ministry of Oil in Baghdad has reportedly signed off on the construction of a USD 5-billion greenfield refinery in Kirkuk. In March this year, the Ministry said it had added a refining unit to the existing Kirkuk facility, raising capacity to 40,000 bpd. Another 10,000-bpd unit is to be installed before the end of 2017. Construction of the new plant is estimated to take up to five years.

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