After gas contract breakdown, KRG 'denies that Genel is entitled to any compensation'
ERBIL (Kurdistan 24) – The Kurdistan Regional Government (KRG) announced on Sunday that, after production sharing contracts (PSC) with Genel Energy broke down for two of its gas fields, it would fight the company's claims to being owed compensation as a result.
The London-based firm announced in August that it had received a notice of termination from the KRG's Ministry of Natural Resources for both the Bina Bawi and Miran natural gas field projects.
Read More: Genel Energy shares plummet after KRG terminates gas field projects
On Friday, the autonomous Kurdistan Region said it had received a letter from a subsidiary of Genel "in which it confirmed that it did not intend to continue to perform its obligations under the Bina Bawi and Miran PSCs, and purported to terminate the PSCs with immediate effect,” a government statement read.
Reuters has reported that the company said last week that it would begin arbitration proceedings for "substantial claims" against the KRG, to which the regional government countered on Sunday that Genel has sought to justify its termination of the contracts by wrongly asserting that the KRG has not kept up its part of the lucrative gas deals.
“The government strongly denies that it is in repudiatory breach of the PSCs,” wrote the KRG. “Genel has also falsely claimed that the government stated it would not perform its obligations under the PSCs.”
“On the contrary, the government has always acted in accordance with its obligations under the PSCs, and has consistently communicated the same to Genel,” the statement continued, adding that the KRG, “regrets that Genel has failed to offer any credible proposals” to develop the fields and “notes that this failure has significantly delayed the ability of the government to develop those fields on a timely basis.”
“The Government strongly denies that Genel is entitled to any compensation,” the government concluded, vowing that it would “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 PSCs.”
