Dubai: UAE energy producer Dana Gas reported a steep rise in third-quarter profit, benefiting from a $1 billion (Dh3.67 billion) payment as part of a settlement agreement with the Kurdistan Regional Government (KRG).
The Abu Dhabi-listed company posted a net profit of $102 million, considerably higher than the $13 million in profit it made during the same period one year earlier.
As part of the Pearl Petroleum consortium, which includes Austria’s OMV, Hungary’s MOL and Germany’s RWE, Dana filed a case against the KRG in the London Court of Arbitration in 2013 accusing it of underpaying for gas liquid production.
In August Dana and its partners reached a financial settlement which saw the Kurdish government pay $600 million immediately to the consortium, plus $400 million to invest in the development of the region.
The settlement agreement boosted Dana’s third-quarter earnings and net profit for the nine-month period ending on September 30, which amounted to $125 million against $26 million during the same period one year earlier.
The settlement led to a reversal of the provision for payments to the KRG, with the balance of unpaid receivables booked to new petroleum costs.
The company is at the centre of a legal dispute that is closely watched by the Islamic finance industry after having refused to redeem $700 million in outstanding Islamic bonds claiming they are no longer sharia compliant and unlawful under UAE law.
It has started legal actions in UK and UAE courts to avoid redeeming the sukuk. A judge at a London High Court — where Dana is fighting the case — could deliver a final ruling on the case on Monday.
Dana “is confident pursuant to independent legal advice of prevailing in its interpretation of the outcome,” it said.
