Atrush block payments disputed
- Abu Dhabi National Energy Company (Taqa) files a default notice against Canadas ShaMaran Petroleum Corporation and the US Marathon Oil
- The claims relate to payments on the Atrush block in the Kurdish Autonomous Region of Iraq
- ShaMaran will dispute the default notice, claiming Taqa is in breach of contract
Abu Dhabi National Energy Company (Taqa) has filed a default notice against a subsidiary of ShaMaran Petroleum Corporation, the Canadian company has disclosed, as well as Marathon Oil KDV (MOKDV), a subsidiary of Houston-based Marathon Oil .
The claim relates to payments on the Atrush block in the Iraqi Kurdish Autonomous Region.
Taqas claim alleges that General Exploration Partners (GEP), a wholly owned subsidiary of ShaMaran, and MOKDV, has failed to pay its full participating interest share for July and August on the Atrush block.
Under the joint operating agreement (JOA) for the block, Taqa holds 39.9 per cent of the block and operates it. GEP and MOKDV are non-operating parters and hold 20.1 per cent and 15 per cent respectively. The Kurdistan Regional Government owns the remaining 25 per cent.
ShaMaran plans to dispute the claim, responding that Taqa itself is in breach of contracts on the block. ShaMaran states that GEP and Taqa are in dispute over the terms of the JOA and the production sharing contract, and claims GEP has made and will continue to make the required payments in full.
The consortium planned to spend $300m on drilling three production wells and the construction of a central processing facility with the aim of reaching a capacity of 30,000 barrels a day (b/d) in 2015.
Work was briefly paused in August 2014 due to instability in northern Iraq. The Kurdish Regional Government has also struggled to make payments to international oil companies operating in the region.
Taqa declined to comment on the dispute to local media.
Taqa has cut its planned 2015 capital expenditure (capex) by 39 per cent to AED3.9bn ($1.1bn) in response to lower oil prices. The company reported a net loss of AED3bn in 2014.
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