(Alliance News) - Genel Energy PLC on Friday said it will "take steps to protect its rights" after the Kurdistan government revealed plans to terminate contracts at the Bina Bawi and Miran gas projects.
The Kurdistan regional government has issued its notices of intention to terminate the two contracts, with Genel commenting that the body has "no grounds" for the move.
Shares in Genel - which owns oil production and development assets in Iraqi Kurdistan - were down 10% to 122.00 pence in London on Friday, having fallen to 113.85p earlier in the morning. Genel's 12-month price range is 109.20p to 194.80p.
Genel plans to issue a notice of dispute for each contract and to hold talks to avoid either party having to refer the problem to international arbitration, the firm said.
"Genel wishes to continue operations under the [production sharing contracts] and to work with the KRG on the development of these fields. However, Genel will take steps to protect its rights under the PSCs and, if necessary, seek compensation, including for its material investment," the company said in a statement.
A commercial understanding between Genel and the Kurdistan government, which governs the Kurdistan region of northern Iraq, was reached in September 2019 to develop the Bina Bawi and Miran fields. However the regional government now has backtracked on the arrangements, Genel noted, despite earlier saying that it would not terminate the contracts while negotiations were ongoing.
Genel, with partners, also operates the Sarta, Taq Taq and Tawke licences in Iraqi Kurdistan.
By Will Paige; willpaige@alliancenews.com
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Genel Energy (GENL)