Sharjah-based Dana Gas, the largest hydrocarbons investor and the only gas producer in the Kurdistan region of Iraq, has initiated arbitration proceedings against Kurdistan’s Ministry of Natural Resources over delayed payments and production rights.

Along with its partners in the Pearl Petroleum consortium, which operates the Khor Mor gas field, Dana Gas has sought clarification of “certain contractual rights” at the London Court of International Arbitration.

In a 22 October statement, Dana Gas said it hoped to clarify the consortium’s long-term contractual rights for the development and marketing of the Khor Mor and Chemchemal gas fields in the north of Iraq, including outstanding receivables owed by the Kurdistan Regional Government (KRG).

Dana Gas alleges that it has already attempted a formal mediation procedure under the court’s rules, which was declined by the KRG.

The dispute has become increasingly public, with Dana Gas revealing that it is owed almost $400m. The KRG not only denies the figure but has also criticised the energy firm for breaching the confidentiality agreement with the disclosure.

The Pearl Petroleum consortium consists of Dana Gas, Sharjah-based Crescent Petroleum, Austria’s OMV, and Hungary’s MOL. It produces an average of 80,000 barrels of oil equivalent (boe/d) from the Khor Mor field, including 335 million cubic feet a day (cf/d) of gas and 14,100 barrels a day (b/d) of condensates.

While the region has become a hub for exploration, the consortium is one of only a handful of firms producing hydrocarbons and is the only gas producer. The Kurdistan region produced a total of just under 200,000 b/d in 2012, but the KRG hopes to increase this to as much as 1 million b/d by 2015.