Reports

Dana Gas payments from Egypt and Kurdistan surge 86% on higher oil prices

Published on : 2021-11-02

Dana Gas, one of the largest private natural gas companies in the region, said payments from operations in Egypt and the Kurdistan Region of Iraq (KRI) increased 86 per cent in the first ten months of the year.

Collections jumped to $283 million for the ten months to the end of October, from $152m in the same period in 2020, boosted by a rise in oil prices, the company said on Tuesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Brent, the international benchmark under which two thirds of the world's oil is traded, has rallied more than 60 per cent this year and was trading at $85.04 a barrel at 10.20am UAE time on Tuesday.

West Texas Intermediate, the gauge that tracks US crude, has increased more than 70 per cent and was trading at $84.24.

The levels of collections in both Kurdistan and Egypt have been “exceptional over the first ten months of the year due to the rise in oil prices”, said Dana Gas chief executive Patrick Allman-Ward.

“Continuing timely payment of invoices and the settlement of outstanding receivables is so important to providing us with the confidence to carry on with our expansion plans in the KRI and Egypt.”

Oil prices have rebounded as demand for crude surges on the back of a strong recovery by the global economy, which slumped into its deepest recession since the 1930s amid the pandemic.

The world economy is expected to grow 5.9 per cent this year, according to the International Monetary Fund.

Oil demand in 2021 is expected to grow by 5.8 million barrels per day, with global consumption hitting 96.6 million bpd, according to Opec data released last month.

The oil producers’ group, which meets this Thursday, expects demand for 2022 to exceed pre-pandemic levels, reaching 100.8 million bpd.

The rise in natural gas prices before the winter season has also increased the possibility of higher volumes of oil products being consumed to generate power, boosting overall demand.

Dana Gas, which owns a 35 per cent interest in Pearl Petroleum, had its share of collections from sales of condensate, gas and liquefied petroleum gas in Kurdistan jump 78 per cent to $150m in the ten-month period, up from $84m a year earlier.

In Egypt, the company collected $133m during the first ten months of this year, a sharp rise from $68m received in the same period in 2020, it said.

In September, an international arbitration tribunal awarded Dana Gas $607.5m in compensation for damages in a case against Iran's state-owned energy producer.

The dispute concerns a 25-year gas sales and purchase contract between Dana Gas affiliate Crescent Petroleum and the National Iranian Oil Company.

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