UAE-based energy firm Dana Gas has won $607.5 million from an international arbitration tribunal, as compensation for damages it incurred in one of its gas supply dispute cases with the National Iranian Oil Company (NIOC).
Dana Gas said a second arbitration with a much larger claim is currently underway, with the final hearing fixed for October of next year in Paris, and for which a final award on damages is expected in 2023.
The dispute is regarding the 25-year gas sales and purchase contract between Dana Gas affiliate Crescent Petroleum and NIOC, an Iranian state-owned energy producer. The project was due to commence in December 2005, but NIOC failed to deliver on its commitments.
This first arbitration is now concluded and covers the period of the first eight and a half years of the 25-year gas sales agreement from 2005 to 2014. The current award will significantly strengthen the balance sheet of Dana Gas, the UAE-based energy firm commented.
“Dana Gas wishes to update the market with respect to its interest in the UAE Gas Project, which was to process, transport and market gas that was contracted to have been delivered by NIOC to Crescent Petroleum under the 25-year Gas Sales and Purchase Contract (GSPC),” the Dana Gas said in a statement.
“The news definitely comes as a positive surprise, given that the market typically discounts any possibility of an award from this case,” EFG Hermes analysts Mr. Ahmed Hazem Maher and Ms. Alaa Saleh Aly said.
The award, if enforced fully, would strengthen Dana Gas’ cash position and the company could use it for a one-off dividend payment.
In June, Dana Gasreceived a London Court of International Arbitration ruling in its favor that validated the termination of an agreement to sell its onshore oil and gas assets in Egypt.
The arbitration was initiated in April by IPR Wastani Petroleum, a member of the IPR Energy Group, which had agreed to buy the assets in October. But Dana Gas canceled the $236 million deal on April 22 because the buyer had failed to meet certain conditions, it said in a statement at the time.
