Genel Energy PLC (LSE:GENL, OTC:GEGYY) said it plans to seek compensation from the Kurdistan Regional Government (KRG) in a dispute over the Bina Bawi and Miran Production Sharing Contracts (PSCs) in Northern Iraq.
The London-listed company told investors it is “left with no practical alternative but to accept that the PSCs are terminated 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 to be commenced in accordance with the disputes process set out in the PSCs,” Genel said in a statement.
Genel entered the PSCs in 2017 though the projects have failed to advance and the KRG has not approved the development plans submitted by Genel, the company said.
In Friday’s statement, the company added: “Genel has received from the KRG formal notices purporting to terminate the PSCs.
“The KRG has also stated that, pending resolution of the dispute as to whether such notices are effective to terminate the PSCs, it will not perform those obligations under the PSCs that would enable Genel to progress the development of the Bina Bawi and Miran fields.
“Since entering into the PSCs in February 2017, Genel has made every effort to engage with the KRG on the development of the Bina Bawi and Miran fields and has submitted numerous development proposals to the KRG for its approval. However, the KRG has for some time made clear its intention not to permit the development of the fields in accordance with the terms of the PSCs.”
Genel said it continues to work with the KRG on the development of its other assets in the region.