A tribunal of the London Court of International Arbitration ordered the Kurdistan Regional Government (KRG) to pay $1.98bn to a consortium including UAE-based Dana Gas in a dispute with regard to the development rights for two oil and natural gas fields in Iraq.
As ordered by the court, KRG will have to pay the amount to Dana and Crescent Petroleum within 28 days for condensate as well as liquefied petroleum gas that would be produced until June 30.
Kurdistan awarded a contract to Dana and Crescent Petroleum in 2007 to develop the Khor Mor and Chemchamal gas fields.
The consortium has rights to develop gas and petroleum from these two fields for 25 years for which the KRG has been disputing since 2009 when Dana Gas and Crescent assigned their benefits under the authorisation to Pearl Petroleum joint venture (JV).
"The detailed terms of the settlement agreement are to be treated in accordance with the confidentiality provisions of the arbitration dispute resolution rules."
It was believed that the consortium was underpaid for gas products supplied from Khor Mor due to which the project became complicated.
In October 2013, the consortium filed an international arbitration case over the dispute in London and legal action was also taken in other courts.
Dana said that so far the consortium had invested over $1.2bn in the project.Dana said it has also reached an "amicable and mutually beneficial settlement agreement" with Germany-based RWE AG's (Rwest) trading unit to resolve a dispute over the venture.
In November 2015, RWE acquired 10% of Pearl Petroleum JV.At present, Pearl Petroleum is 35% owned by Dana Gas, 35% by Crescent, 10% each by OMV, MOL and RWE.
Dana said in a statement: "The detailed terms of the settlement agreement are to be treated in accordance with the confidentiality provisions of the arbitration dispute resolution rules.
"Dana Gas and its consortium partners are committed to working together with the KRG in order to realise the full potential of the significant resources in the Khor Mor & Chemchemal fields for the benefit of the Kurdistan Region and Iraq, as well as the wider region."
Commenting on the tribunal ruling, KRG said: "The arbitration is subject to duties of confidentiality under applicable law and arbitration rules.
"Without waiving these duties of confidentiality, the KRG is obliged to correct inaccurate public statements made by Dana, which create an impression that is materially misleading and incomplete."