KRG Ministry of Natural Resources

3 August 2017

Erbil, Kurdistan Region, Iraq – On 31 July 2017, the Kurdistan Regional Government (“KRG”) received a partial ruling on the allocation of costs from the tribunal in the ongoing arbitration between the KRG and Dana Gas PJSC, Crescent Petroleum Company International Limited and Pearl Petroleum Company Limited (collectively “the Claimants”).

The arbitration is subject to duties of confidentiality under the applicable law and arbitration rules. Without waiving these duties of confidentiality, the KRG is obliged to correct certain public statements by Dana Gas, which quote selectively from the ruling and create an impression that is materially misleading and incomplete. In particular, the Claimants’ public statement fails to mention that:

1. The tribunal’s ruling is only a partial ruling on some costs issues in the arbitration and is not a final determination on all costs issues (or all the other remaining issues) in the arbitration.

2. The tribunal reduced the legal costs the Claimants had claimed by millions of dollars to reflect the “success of the KRG” in defeating the Claimants’ claim for payments for excess gas, which the Claimants had valued at over US$1.3 billion.  The tribunal held that these claims, on which the KRG succeeded in full, were “in economic terms of considerable importance.”  The Tribunal also held that the discount on their costs offered by the Claimants was “inadequate to reflect the success of the KRG on the excess gas issue.”

3. The tribunal disallowed further significant legal costs the Claimants had claimed.  The tribunal held that the Claimants had failed to discharge their burden of showing that these costs were properly recoverable.

4. The tribunal rejected the Claimants’ position that they should be entitled to recover 100% of the fees and costs of the LCIA and the tribunal and, again, reduced the amount awarded to the Claimants to reflect the relative success of the KRG.

The KRG regrets that, once again, the Claimants have sought to make media statements that are selective, misleading and designed to harm the KRG.  The KRG hopes that, going forward, rather than disseminating misleading information in the media for their own purposes, the Claimants will focus their energies on working together with the Government and People of the Kurdistan Region in the best interests of all concerned.