Sonatrach Wins Medex Arbitration

Algerian state producer Sonatrach has won an international arbitration ruling against private Paris-based and Cyprus-registered Medex Petroleum relating to its production-sharing contracts at Bourarhat Nord and Erg Issaouane, according to a report by state news agency APS December 13.

Sonatrach made a referral to the Vienna-based Uncitral arbitration panel, which the state company said was decided in its favour on December 12. The ruling, said Sonatrach, enables it to take over without interruption the operation of these two concessions that will continue to produce 15,500 b/d oil, 3.7mn m³/d of sales gas, 8,680 b/d condensate and 500 t/d of LPG. 

Sonatrach was advised by Paris-based law firm Quinn Emmanuel, reported APS. No compensation was mentioned.

Medex all but divested from neighbouring Tunisia in 2014, selling a 90% interest in its onshore Zaafrane gas prospect there to Dutch explorer Mazarine.

Sonatrach this October won a more significant upstream arbitration case against Spain’s Repsol and two South Korean partners that meant it would not have to pay $240mn of back-taxes to the trio, advised by Shearman & Sterling. Sonatrach now hopes for a similar outcome in a case initiated this May by Repsol and Total against it, Total being the operator.

Quinn Emmanuel helped EDF-owned Edison win a case against Eni over a Libya gas supply deal in February, securing a €1bn refund for Edison from payments it made between 2009 and 2012.

Mark Smedley