Termination of Miran and Bina Bawi PSCs
Erbil, Kurdistan Region, Iraq (GOV.KRD)- On 10 December 2021, the Kurdistan Regional Government received a letter from a subsidiary of Genel Energy plc (“Genel”). In this letter, Genel confirmed that it did not intend to continue to perform its obligations under the Bina Bawi and Miran PSCs, and purported to terminate the PSCs with immediate effect. The Government understands that Genel Energy plc has made the same assertions in a public press release dated 10 December 2021.
Genel’s letter and the related press release were prompted by the Government’s issuance on 5 December 2021 of formal Notices of Termination, which validly terminated the PSCs subject only to the completion of the dispute resolution process set out in the PSCs.
Genel has sought to justify its termination of the PSCs by wrongly asserting that the Government is in repudiatory breach. The Government strongly denies that it is in repudiatory breach of the PSCs. Genel has also falsely claimed that the Government stated it would not perform its obligations under the PSCs. On the contrary, the Government has always acted in accordance with its obligations under the PSCs, and has consistently communicated the same to Genel.
However, Genel’s 10 December 2021 communication confirmed unequivocally that Genel had renounced the PSCs, and the Government has therefore confirmed today to Genel that the PSCs are validly terminated with immediate effect.
The Government regrets that Genel has failed to offer any credible proposals to develop the Bina Bawi and Miran oil and gas fields, and notes that this failure has significantly delayed the ability of the Government to develop those fields on a timely basis.
The Government also notes Genel’s public statement that it will pursue a substantial claim in international arbitration from the Government as a consequence of the termination of the PSCs. The Government strongly denies that Genel is entitled to any compensation. The Government will vigorously defend any claim that is brought by Genel, and intends to pursue its own counterclaims for damages resulting from Genel’s renunciation of the PSCs.