The chairman of Irish oil exploration and development company Petrel Resources has revealed that the company has not been paid for work carried out on its US$197 million Subba and Luhais oilfield contract.
John Teeling said that since being paid an initial US$20 million when it signed the contract, the company has carried out 50% of the project work and billed US$54 million to the Iraq authorities. The sum has not yet been paid.
“Agreements have been reached, the latest in March 2009, where payments are promised but to no avail,” Teeling said.
“With extreme reluctance, we put the Subba and Luhais project on care and maintenance in October 2008, and temporarily disbanded a world class technical team,” Teeling added.
Teeling also said that Petrel has offered to take over as operators of the field, complete the development and then take payment in the form of oil. This was well received in some quarters, but due to the lack of a Hydrocarbon Law this was a difficult plan to implement.
“Our strategy has been to complete the development of Subba and Luhais as a first step to building an Iraqi oil company,” Teeling said.
“We continue to explore every avenue to reach a settlement, but Petrel, and our contractors must either be paid or the contract must be changed, so that Petrel can take oil as payment.”
Petrel Resources also have other interests in both Iraq and Jordan.
