Pearl Petroleum Rejects KRG Breach Allegation, Says KRG Knew of Kirkuk Gas Deal Since January

Peregraf - Dana Gas and Crescent Petroleum, joint operators on behalf of the Pearl Petroleum consortium, said on August 7 that they were surprised by the Kurdistan Regional Government's statement a day earlier accusing them of supplying gas to Kirkuk without authorization, and rejected the KRG's allegation that the move breached their contractual obligations. Peregraf has not independently verified the claims made in the company's statement.

Pearl Petroleum claimed, without providing supporting documentation, that the KRG had known about the Gas Sales Agreement with Iraq's Ministry of Electricity since January of this year and had been provided with a copy of it, following what the statement described as years of discussions and efforts by the company, during which it said the KRG was regularly updated. The company claimed the KRG Ministry of Natural Resources was aware of the preparations for the gas supply. The KRG's own statement, issued a day earlier, said it first learned of the deliveries when the companies made them public.

Pearl Petroleum asserted that the agreement was entered into in strict compliance with its exclusive marketing rights, which it said have previously been upheld in multiple international legal proceedings, and claimed the agreement did not require additional authorization or approval from the KRG. The consortium said it therefore rejects any allegation that it breached its contractual obligations. Peregraf could not immediately confirm the company's characterization of its marketing rights or the legal proceedings it referenced.

The company also alleged, without citing figures beyond its own statement, that the KRG has been in material arrears on its contractual payment obligations for more than three years — a claim the KRG did not address in its own statement. Pearl Petroleum said the 100 million standard cubic feet per day of gas supplied to the Ministry of Electricity in Kirkuk comes from its excess capacity at Khor Mor made possible by the KM250 project, and said this is in addition to 655 million standard cubic feet per day it claims to currently supply the KRG for use in its power stations — a figure the company did not attribute to any independent source. The statement claimed that volume meets the Kurdistan Region's actual needs and has enabled electricity sales from the region to the Ministry of Electricity for almost a decade.

Pearl Petroleum also stated it has invested more than $4 billion in the sector in the Kurdistan Region since 2007, calling itself the largest investor in the sector in the region — a claim likewise sourced only to the company itself. The statement said the company remains committed to its obligations to the KRG and to its operations and investments for the people of the Kurdistan Region and Iraq.

The statement did not address the KRG's specific request, made in its August 6 statement, for additional gas volumes to be directed to the KRG's own power stations rather than to Kirkuk.