Kurdish gas market: United Arab Emirates energy company Dana Gas (DANA.AD) announced on Wednesday that it had received $80 million from the Kurdistan Regional Government (KRG) in Iraq, which has sometimes struggled to make payments on time for more than a decade.
Dynamics of the Kurdish gas market: The Dana Gas consortium receives $80 million
Pearl Petroleum, a consortium majority-owned by Dana, “recently” received $101 million from KRG “despite continuing challenges in Iraq, and is in ongoing discussions with KRG to settle outstanding receivables as quickly as possible”, Dana Gas said in a statement on its first-half results.
Turkey halted exports of 450,000 barrels per day (b/d) from northern Iraq through the Iraq-Turkey pipeline on March 25, following an arbitration ruling by the International Chamber of Commerce (ICC). Dana Gas has also received $26 million in payments from Egypt, where its only other operations are located, he said.
At the end of June, the company had receivables of $97 million in the Kurdistan Region of Iraq (KRI) and $41 million in Egypt.
Impact of oil prices: Dana Gas faces a 25% drop in net profit
Dana Gas reported a 25% drop in first-half net income to 304 million dirhams ($83 million), due to lower oil prices and reductions on condensate sales in the KRI, where Dana “began selling to local third-party buyers as other companies closed production.” “To counter lower energy prices, the company has strengthened its focus on maintaining production and reducing costs, while working with partner governments in Egypt and the KRI to settle outstanding payments,” Dana Gas CEO Patrick Allman-Ward said in the statement.
The company’s overall production fell by 2% to 59,800 barrels of oil equivalent per day in the first half compared with the previous year, with a 12% drop in production in Egypt compared with a 5% rise in the KRI. The drop in Egypt is due to natural declines on the fields.
