(Bloomberg) -- Iraq's semi-autonomous Kurdish region reached a financial settlement with Dana Gas PJSC and its partners over delays at a natural gas project.
The Kurdistan Regional Government said it will immediately pay United Arab Emirates-based Dana and its partners in the Pearl Petroleum consortium $600 million, plus a further $400 million to invest in development of fields in the region, according to a statement on the KRG's website. Pearl Petroleum agreed to boost gas output at the Khor Mor field by 160 percent starting in about two years.
A further $1.2 billion will be reclassified from a debt owed by the KRG to Pearl to become an outstanding cost recoverable by the venture from revenues generated from Khor Mor and the Chemchemal field.
The settlement ends an arbitration process which had lasted for almost four years. The KRG originally signed a deal with Pearl to develop the fields in 2007, before a dispute arose between them. The consortium had filed a claim with a U.S. court seeking damages of as much as $26.5 billion.
Pearl Petroleum's biggest shareholders are Dana Gas and Crescent Petroleum, both based in the Gulf emirate of Sharjah, part of the U.A.E. Austria's OMV AG, Hungarian energy group Mol Nyrt and Germany's RWE AG also have shares, according to the venture's website.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net.
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Brian Wingfield
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