x Abu Dhabi, UAEFriday 21 July 2017

Sharjah gas company hopeful with Iraqi oil minister

The appointment of the new oil minister is seen as a positive move towards resolving the disputes between the Kurdish Regional Government and the central government of Iraq, which would bode well for the Sharjah gas company.

The recent formation of an Iraqi government after a nine-month wait may reverse a downward trend for Dana Gas.

As part of the new cabinet approved by the Iraqi parliament this week, Abdul Kareem Luaibiwas appointed the oil minister, and analysts say he should be a solid partner for foreign companies with interests in Kurdistan, including Dana, based in Sharjah.

Mr Luaibi, the former deputy oil minister, previously managed Iraq's upstream development, including the auction of 11 oil and three gas deals to foreign companies. Dana Gas has been in a awkward position since the former oil minister Hussein Shahristani - now the deputy prime minister for energy - was involved in a decision that contracts awarded unilaterally by Kurdish regional authorities were illegal.

"Foreign oil companies knew exactly what they were getting into when they decided to invest in the Kurdish region," said Mustapha Alani, a senior adviser at the Gulf Research Centre in Dubai. "They knew the legal issues were foggy."

But already there are positive signs from the new government regarding Kurdistan.

Ali Hussain Balou, a top adviser to the Kurdish natural resources ministry, told Reuters that the appointment of Mr Luaibi would contribute to resolving oil-related issues with the central government.

And, one day into his new post, Mr Luaibi said he planned to meetKurdish oil industry officials soon and said dialogue "with our Kurdish brothers will continue in order to reach a resolution that is in the general interest".

Shares of Dana Gas have fallen by 17.4 per cent since September, closing yesterday at 71 fils.

Oil prices have risen to two-year highs at about $90 a barrel but that has yet to be reflected in the price of Dana stock.

A resolution of the contracts wrangle would also mean Dana would be able to export its byproducts from downstream activity at international prices.

halsayegh@thenational.ae