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    Dana wins arbitration over Egyptian asset sale


Dana's main focus in Egypt is on the offshore Block 6 concession, where it is targeting a 20 trillion ft3 gas resource.

by: Joseph Murphy

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Natural Gas & LNG News, Africa, Corporate, Mergers & Acquisitions, Litigation, Exploration & Production, News By Country, Egypt

Dana wins arbitration over Egyptian asset sale

The UAE's Dana Gas will continue operating its assets in Egypt after winning an arbitration case against Texan company IPR Energy, the Abu Dhabi-listed company announced on July 25.

Dana agreed to sell its onshore oil and gas assets in Egypt to IPR for $236mn in October last year, with the sale covering its 100% interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases. But Dana later terminated the deal, saying transaction conditions were not met by an April 14 deadline.

IPR disputed Dana's decision, though, filing a case at the London Court of Arbitration. But the tribunal rejected IPR's claim "in its entirety," Dana said on July 25, "concluding that Dana Gas' termination of the SPA [sales and purchase agreement] was valid."

Dana had said the sale would help it pay down debts and refocus its business on operations in the Kurdistan region of Iraq. The company, which currently produces around 30,000 barrels of oil equivalent/day of mostly gas from its 14 development leases in Egypt, said it would now seek to maximise value from the assets. 

"The board has made a decision to continue to hold and operate the assets in the best interests of the company and its shareholders as well as for our broader stakeholders," Dana CEO Patrick Allman-Ward commented.

Dana's main attention is on Egypt's offshore Block 6 concession, which it estimates holds more than 20 trillion ft3 of gas. It plans to drill an exploration well there in the first quarter of 2022.

Offshore development has been a driving force behind gas production growth in Egypt since the launch of the Eni-operated Zohr field in late 2017. The country wants to exploit its Mediterranean reserves to expand the role of gas in the Egyptian economy and increase its LNG exports. The chairman of the Egyptian Gas Association, Khaled AbuBakr, discussed the prospects of Egypt's gas sector with NGW in an interview in July.