Crescent Petroleum has announced that it is taking its gas supply contract with the National Iranian Oil Company (NIOC) to international arbitration after losing patience with the state-owned company’s delays in delivering contractual commitments.
“NIOC contractors have announced that they finally expect to achieve technical readiness later this summer, but we have still not had official notification of a date of readiness to deliver gas from NIOC despite numerous letters to the Iranian Petroleum Minister as NIOC Chairman requesting confirmation of a date,” a statement released by Crescent Petroleum said.
“Also certain negative public statements by some NIOC officials have led to loss of confidence in NIOC’s respect for its contractual commitments, and we are therefore seeking legal determination of the obligations of both parties.”
“We hope for a successful final resolution of all matters so that gas deliveries can finally commence on this important project, which will bring great benefits to the region’s economy,” it added.
The 25-year contract, which is Iran’s first contract for gas export from the south of Iran, was signed between the UAE-based company and NIOC in 2001 after several years of negotiations. NIOC contractually committed to commence gas deliveries to the UAE in December 2005. The contract provides for any disputes to be determined by international arbitration under the rules of the International Chamber of Commerce.
“We did not want to take this step – Crescent and its customers in the UAE have been extremely patient, but with entering the fourth summer with still no contractual gas supplies,” the statement continued.
“Some of our customers have lost patience and are demanding performance, leaving us with no option but to seek a determination on the legal obligation of NIOC to deliver gas, and also to seek an indemnity from NIOC in respect of the claims of our customers,” it added.
