LONDON (Reuters) - Genel Energy will start arbitration for "substantial claims" against Iraqi Kurdistan over the regional government's termination of production sharing contracts (PSC) in August for its Bina Bawi and Miran gas projects, the firm said on Friday.
A spokesperson for Genel, whose production is focused on the Iraqi Kurdistan region, declined to comment on the size of the claim. Genel has spent around $1.4 billion on the projects, including acquisition, maintenance, drilling and other costs.
"The Board has concluded that it is left with no practical alternative but to accept that the PSCs are terminated as a consequence of the KRG's repudiatory breach and to claim compensation from the KRG," Genel said.
"Genel's claims are substantial and will be brought in a London seated international arbitration to be commenced in accordance with the disputes process set out in the PSCs."
It added any remaining value of the projects would be "derecognised and therefore removed from the balance sheet."
Genel had already written down $424 million for Miran in 2019 over slow progress at Bina Bawi, given the latter's cashflow was needed to start the former.
Iraq's Kurdistan region lost another London-based case in 2017 against UAE-based Dana Gas and its partners with a final settlement of $2.24 billion.
Fellow London-listed oil and gas producer Cairn won an international arbitration case related to tax against the Indian government, with a tribunal awarding Cairn damages of $1.2 billion plus interest and costs.