DUBAI: Dana Gas PJSC is discussing with Egypt an agreement that would allow it to increase fuel production and halt a drop in profitability, Chief Executive Officer Patrick Allman-Ward said.
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 Sunday. “We have the outlines of what we think is a very attractive deal.”
UAE support to Egypt “is encouraging” as it boosts the nation’s ability to pay its fuel suppliers, he said. The UAE in October announced an initial $4.9 billion package to help Egypt’s economy overcome the impact of political turmoil, which included $1 billion toward paying its energy bill.
Sharjah-based Dana Gas Sunday said full-year profit fell 5.6 percent to 571 million dirhams ($155 million) on higher royalties 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.
A version of this article appeared in the print edition of The Daily Star on February 03, 2014, on page 5.