Dana Gas overcome setbacks with Kurdish and Egyptian governments

A Dana Gas plant in the Kurdish region of Iraq. Dana Gas / Reuters

Profits at Dana Gas rose to Dh128 million last quarter, a 12 per cent increase compared with the same period the year before, thanks to ramped-up production in Egypt and fuel sales in the Kurdish region of Iraq.

High-margin sales of liquefied petroleum gas enabled by a newly repaired loading facility in the semi-autonomous region are helping the company to wait out about Dh2.9 billion in late payments from the Egyptian and Kurdish governments, the Sharjah-based producer reported yesterday.

A tribunal has been formed for its international arbitration case against the Kurdistan Regional Government (KRG), the company separately disclosed on the Abu Dhabi bourse yesterday.

“If you look at the actual production and performance of the company, despite the very difficult operating environment in Egypt, the fact is that we’ve been able to grow that production in Egypt, and we’re hopeful that we’ll be able to sustain that growth this year,” said Patrick Allman-Ward, the chief executive of Dana.

Net profit for the year dropped 6 per cent to Dh571m, while overall production averaged 64,000 barrels of oil equivalent per day, an increase of 8 per cent on the year before.

Dana Gas, which launched arbitration against the KRG in October, said the government owed it Dh1.9bn and had not made any “significant” payments since July. The company said it was still in talks with the Egyptian government, which owed Dh1bn as of the end of last year.

Dana, which won a concession at Egypt's North Al Arish block last year, said it was open to collaborating with other UAE companies, such as Abu Dhabi National Energy (Taqa) and Mubadala Petroleum, that have been evaluating investments in Egypt as part of a Ministry of Foreign Affairs-led initiative.

“Obviously the support that the Emirati government has given to Egypt is very encouraging because that allows the Egyptian government to pay the petroleum sector,” said Mr Allman-Ward. “We’re always interested in investigating opportunities for cooperation.”

Shares of Dana Gas closed 2.13 per cent lower at Dh0.92 on the Abu Dhabi Securities Exchange yesterday.