Dana begins arbitration against MOL
Dana and Crescent Petroleum own a combined 70 per cent stake in the Pearl consortium.
Dubai - Dana Gas and its partners in the Pearl Petroleum consortium settled a dispute last month
Dana Gas and its partner Crescent Petroleum have begun arbitration proceedings against Hungary's MOL Group over the settlement agreement reached by Dana and its consortium partners with Iraq's Kurdistan Regional Government (KRG), the UAE company said on Wednesday.
Dana Gas and its partners in the Pearl Petroleum consortium settled a dispute last month at the London Court of International Arbitration over payments for gas liquids production.
The KRG agreed to pay $1 billion to the consortium and to reclassify some additional $1.24 billion from debt to outstanding costs that will be recovered by Pearl from future revenues.
Hungary's MOL, which owns a 10 per cent stake in Pearl, "sought to link its endorsement of the settlement to a renegotiation of the terms by which it first secured its participation in Pearl back in May 2009," Dana said.
It said the terms in question concern "the commitment to certain contingent payments."
MOL is unsatisfied with the way Dana Gas, Crescent Petroleum and the Pearl consortium handled the settlement and would have pursued a final litigation and enforcement outcome against KRG instead.
Dana and Crescent Petroleum have started proceedings at the same London arbitration court, the company said, adding that both companies have sold their combined six per cent stake in MOL.
Dana and Crescent Petroleum own a combined 70 per cent stake in the Pearl consortium, while Austria's OMV, Germany's RWE, and MOL each own 10 per cent.
The KRG settlement boosted Dana's cash balance and lifted the company's stock on the Abu Dhabi stock exchange by 14 per cent.