The Bina Bawi and Miran Production Sharing Contracts (‘PSCs’) have been updated by Genel Energy.
Following Genel’s announcement on 20 August 2021 that notices of intention to terminate the Bina Bawi and Miran PSCs had been received from the Kurdistan Regional Government’s Ministry of Natural Resources, Genel has received formal notices purporting to terminate the PSCs from the KRG. The KRG has also stated that, pending the resolution of the dispute over whether such notices are effective to terminate the PSCs, it will not perform those obligations under the PSCs that would allow Genel to advance the development of the Bina Bawi and Miran fields.
Genel has made every effort to engage with the KRG on the development of the Bina Bawi and Miran fields since entering into the PSCs in February 2017, and has submitted numerous development proposals to the KRG for approval. However, the KRG has made it clear for some time that it will not allow the fields to be developed in accordance with the terms of the PSCs.
In these circumstances, the Board has concluded that the only practical option is to accept that the PSCs have been terminated as a result of the KRG’s repudiatory breach and to seek compensation from the KRG. Genel’s claims are substantial, and they will be heard in a London-seated international arbitration, which will begin in accordance with the PSCs’ dispute resolution process.
Genel has a long and fruitful relationship with the KRG, and we continue to collaborate on the development of our other assets as we strive to achieve our mutual goal of increasing production in the KRI for the benefit of all stakeholders. Genel will keep the market informed of future developments.
Following the termination of the PSCs, the balances associated with holding title to these PSCs will be deregistered and thus removed from the balance sheet.