Petrel to receive $7m settlement

Irish AIM-listed oil and gas exploration firm Petrel Resources is to get $7 million from the Iraqi Oil Ministry as a settlement for a project in southern Iraq.

Last year, the company said it was seeking new oil rights in Iraq in lieu of money it was owed for the Subba and Luhais oilfield development project.

Petrel signed a $197 million contract in 2005 and received a $20 million advance into a JV account from the Iraqi authorities, and completed approximately 50 per cent of the project work. However, there were issues over payment.

The company said it has already received $2 million of the $7 million owed and will receive the remaining money in two payments of $2.5 million over the next 12 months.

The Petrel-Makman joint venture will now complete the Subba and Luhais oilfield development services contract, and under the terms of the original joint venture agreement has handed over primary responsibility for the final phases of work at Subba and Luhais to Makman.

"I am delighted to report that all parties have agreed an amicable way forward for the Subba and Luhais oilfield development services contract in Iraq. Development work will re-start immediately. Under the agreement Petrel will receive $7 million in cash and carry no project liabilities," said managing director David Horgan.