ERBIL, Kurdistan Region — The Kurdistan Regional Government (KRG) has reached agreements regarding outstanding receivables owed to and the Norwegian oil and gas operator DNO ASA which operates in the Tawke Field and London-traded Genel Energy Plc., which has interests in both Taq Taq and Tawke Fields.
“The Kurdistan Regional Government (Government) has reached definitive binding agreements on the settlement of all historical outstanding receivables owed to DNO ASA, the operator of Tawke Field (DNO), and Genel Energy plc, which has participating interests in both Taq Taq and Tawke,” KRG’s Ministry of Natural Resources (MNR) announced in a statement on Thursday.
Highlights of the settlements included DNO and Genel “receive 3 percent and 4.5 percent respectively of gross Tawke license revenues each month from the government over a five-year period, effective 1 August,” detailed the MNR.
DNO stated it “has been assigned the 20 percent interest in the Tawke license as part of a landmark settlement of outstanding receivables owed to the company for past crude oil deliveries.”
The Nowegian company also increased its stake in Tawke.
"Following the settlement, DNO holds a 75 percent operated stake in the license containing the Tawke and Peshkabir fields with combined proven and probable reserves in excess of 500 million barrels and production in excess of 100,000 barrels of oil per day," DNO stated.
Additionally, DNO and Genel “shall make no further claims on all historical outstanding Tawke license receivables from the Government,” according to the MNR.
Additionally, DNO and Genel “shall make no further claims on all historical outstanding Tawke license receivables from the Government,” according to the MNR.
Genel, which is traded on the London Stock Exchange, stated “Cash flow is expected to be materially enhanced over the course of the agreement, delivering significant value creation for all stakeholders.”
Genel has also agreed “settlement of its claims for its share of historical outstanding Taq Taq license receivables from the government,” according to the MNR.
The ministry stated it has no further no claims on DNO or Genel, as it has “exercised its audit rights and made provisions to its own satisfaction with respect to the Tawke license for the period up to the 31st July.”
Similarly because of the audit rights, the ministry said it “has no further claims on payments booked or received by Genel in this regard.”
DNO stated a $150 million water project “is no longer required by the government,” which had been the company’s obligation.
“The government has also discharged DNO and Genel from certain payment obligations including production bonuses, license fees, capacity building payments (in the case of Genel) and funding of a water purification project (in the case of DNO),” stated MNR.
The adjustments settle the KRG’s further obligation of past payment “of receivable or Petroleum Costs to these two companies with respect to deliveries of oil to the government,” stated the MNR.
The ministry called the negotiations “productive and cooperative.”
“We believe that this initiative will convey a strong positive message to the investors that the government is fully committed to a robust win-win partnership with all the international oil companies operating in Kurdistan,” stated MNR.
Tawke is located northwest of Duhok and Taq Taq is some 85 kilometers southeast of Erbil.
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