August 30, 2017 / 4:33 PM / a year ago

Kurdistan pays $1 bln to Dana Gas, partners to settle $2.2 bln London case

LONDON, Aug 30 (Reuters) - Iraq’s Kurdistan has reached a full and final settlement with Dana Gas and its partners over a $2.2 billion London court case which will see the semi-autonomous region immediately pay the UAE-based firm $1 billion, the two sides said on Wednesday.

Dana Gas, its parent Crescent Petroleum and its partners filed a case against the KRG at the London Court of International Arbitration in October 2013 regarding their contract with the Kurdish government and accusing it of underpaying for gas liquids production.

The KRG has argued that the case came amid its fight against Islamic state and as its budget suffered from a steep drop in revenues due to lower oil prices, which forced it to postpone and restructure payments to some counter-parties.

Under the settlement, Kurdistan will immediately pay $600 million to the Pearl Consortium, in which Dana and Crescent own 70 percent and their partners Austria’s OMV, Hungary’s MOL and Germany’s RWE own 10 percent each.

Kurdistan will also immediately pay another $400 million to go exclusively towards Pearl’s further development to increase production its fields.

The balance of $1.24 billion will be reclassified from debt to outstanding costs to be recovered by Pearl from future revenues. (Reporting by Dmitry Zhdannikov; Editing by Susan Fenton)

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