Dana Gas PJSC is discussing with Egypt an agreement that would allow it to increase fuel production and halt a drop in profitability, said Chief Executive Officer Patrick Allman-Ward.
Dana Gas, which relies on Egypt and Iraq’s Kurdish region for most of its revenue, is discussing with Cairo a payment schedule “that would allow the company to make further investments” in the country, he said during a conference call with journalists today. “We have the outlines of what we think is a very attractive deal.”
U.A.E. support to Egypt “is encouraging” as it boosts the nation’s ability to pay its fuel suppliers, he said. The U.A.E. in October announced an initial $4.9 billion package to help Egypt’s economy overcome the impact of political turmoil, which included a $1 billion toward paying its energy bill.
Sharjah, United Arab Emirates-based Dana Gas today said full-year profit fell 5.6 percent to 571 million dirhams ($155 million) on higher royalties payments to Egypt. At the end of 2013, it had receivables of $274 million from Egypt and $515 million in the Kurdish region.
The company was forced to restructure about $920 million of Islamic bonds in 2012 after payment delays and last year referred its conflict with the Kurdish Regional Government to the London Court of International Arbitration.
Daily average production rose 8 percent last year to 64,700 barrels of oil equivalent, from 59,800 barrels, as output from Egypt increased, the company said in its 2013 preliminary results.
“From a management perspective, we are very confident about the company’s performance,” Allman-Ward said, without giving a profit guidance for this year.
“Significant” progress in talks between Iran and world powers is needed before Dana Gas can consider opportunities in the country, he said.
Iran Foreign Minister Mohammad Javad Zarif today said his government wants to strike a long-term agreement with China, France, Germany, Russia, the U.K. and the U.S. when negotiations resume on its nuclear program on Feb. 18 in Vienna.