BAGHDAD, Iraq - Genel Energy on Sunday said it has no choice but to accept the Kurdistan Regional Government’s (KRG) cancellation of two gas contracts, claiming they would pursue compensation through international arbitration.
A statement released by the energy company said they had no choice but to accept the contract terminations “as a consequence of the KRG’s repudiatory breach and to claim compensation from the KRG.”
“Genel’s claims are substantial and will be brought in a London seated international arbitration,” it added, saying the government had blocked the company’s efforts to develop the fields in accordance to the contracts.
The KRG’s ministry of natural resources later issued a statement, saying the government "strongly denies that it is in repudiatory breach.”
It also disputed the claim that Genel is entitled to compensation.
"The Government will vigorously defend any claim that is brought by Genel, and intends to pursue its own counterclaims for damages resulting from Genel’s renunciation of the” contracts, reads the statement.
The KRG in August served notice that it intends to cancel the Bina Bawi and Miran gas contracts. The UK-listed company contested the termination.
The two fields have large natural gas reserves. The Bina Bawi field holds an estimated 8.2 trillion cubic feet of natural gas and 37 million barrels of oil. Volume estimates at Miran are 6.6 trillion cubic feet of raw gas and 93 million barrels of oil and condensates.
“Genel believes that the KRG has no grounds for issuing its notices of intention to terminate,” the company stated, adding they had agreed in September 2019 to develop the fields and the KRG confirmed it would not cancel the contract while negotiations were ongoing.
Genel Energy operates four fields in the Kurdistan Region – Taq Taq, Sarta, Tawke, and Peshkabir – with total reserves of some 117 million barrels of oil.
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