x Abu Dhabi, UAEThursday 27 July 2017

Dana Gas facility in Iraq repaired

Dana Gas and its parent company Crescent Petroleum have repaired their liquefied petroleum gas facility in Iraqi Kurdistan.

Dana Gas and its parent company, Crescent Petroleum, have repaired their liquefied petroleum gas (LPG) facility in the Kurdish region of Iraq.

The Kor Mor plant was damaged when a tanker smashed into it last year, halting its production of up to 900 tonnes of oil equivalent a day.

LPG is used as fuel in vehicles and for heating, and the Kor Mor product was sold into the domestic Kurdish market. The repairs should boost revenues out of Iraq, Dana said in a statement.

Dana and Crescent remain in negotiations with the Kurdish Regional Government (KRG) about receivables that the companies are owed because of payment delays in the autonomous region.

"We are working with the KRG and the ministry to resolve the outstanding issues including the receivables, as soon as possible," said Rashid Al Jarwan, Dana's executive director and acting chief executive.

The central government has withheld most of the export revenues for Kurdish oil over a long-held dispute regarding the KRG's contracts with international oil companies, which Baghdad considers illegal.

Dana received US$48 million for its gas last year, after the finance ministry in Baghdad agreed to release $1 billion as payment for KRG exports. The Kurdish and the central government are in negotiations over another payment, which is believed to be smaller.

KRG exports via Iraq's infrastructure stopped late last year, but a pipeline connecting the region's main oilfields with the Turkish border is scheduled to be completed by the end of the year. The pipeline will give the Kurds an independent export route, and dramatically improve the payment situation for international oil companies. Oil is already being exported to Turkey by lorry.

The two companies have together produced 88 million barrels of oil equivalent (boe) in the region since 2008, according to a statement by Dana. Daily production now stands at 88,000 boe a day.

The repairs at the Kor Mor LPG plant cost $15m.

Dana and Crescent have together invested more than $1bn into their gas production in the region. Austria's OMV and Hungarian MOL are minority partners in the Kurdish operations, which include the gasfields of Kor Mor and Chemchemal as well as the LPG plant.

 

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