Rumours of Crescent’s arbitration resulted in Dana’s shares rising by 4.8 per cent on Tuesday. The shares held their gains despite analyst predictions of a sell-off, closing 1.1 per cent higher at Dh0.89.
Dana Gas keeps its distance on Iranian gas dispute
Dana Gas has distanced itself from reports that an international arbitration panel has found in favour of its parent company in its long-running dispute with Iran over an ill-fated gas supply deal.
Reports on Tuesday suggested that National Iran Oil Company (NIOC) was liable to pay Crescent Petroleum several billion dollars in compensation as part of proceedings initiated in 2009.
A source with knowledge of the situation said yesterday that an arbitration panel had indeed found in Crescent’s favour, declining to give further details about when the award was made and what amount was payable by NIOC.
But Dana Gas’s chief executive declined to discuss the matter. “This is a matter of course that is between Crescent Petroleum and NIOC, and one that we are not party to,” said Patrick Allman-Ward.
“We have not received any communication from Crescent Petroleum on the matter,” he said.
A spokeswoman for Crescent Petroleum declined to comment.
“Dana Gas does not as a policy comment on market rumours or speculation or third party statements,” said the company’s corporate secretary, Mohamed Nour Eldin El Tahir, in a statement on the Abu Dhabi Securities Market.
“The company will continue to keep the market regularly updated on any relevant developments, as it has always done.”
Rumours of Crescent’s arbitration resulted in Dana’s shares rising by 4.8 per cent on Tuesday. The shares held their gains yesterday despite analyst predictions of a sell-off, closing 1.1 per cent higher at Dh0.89.
The arbitration dispute centres on a 25-year agreement signed between Crescent National Gas Corporation — a company co-owned by Dana and Crescent Petroleum — and NIOC in 2001 for the supply of 600 million cubic feet a day of Iranian gas, scheduled to come online in 2005.
No gas has been delivered to date, a failure blamed on NIOC’s failure to complete production facilities for the Salman gasfield in the Arabian Gulf, and its demand to be paid more than originally agreed.
Last month Dana Gas said in its first-quarter results that it expected “an enforceable decision” by the tribunal before the end of the year.
However, enforcing an award against NIOC in the Iranian courts is unlikely to be a simple matter, according to a senior international arbitration lawyer.
“As a matter of law it’s a simple matter in theory, because Iran is a signatory of the New York Convention for the enforcement of international arbitration awards, so on paper it should be a very simple exercise,” he said, requesting anonymity.
“However, the Iranian current judiciary may not be independent to rule against a government entity, as is the case within many developing countries.”
One option open to Crescent would be to seek to enforce the award against overseas NIOC assets, such as oil shipments, in jurisdictions such as Singapore that has a track record of enforcing arbitration awards.
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