$1bn invested in Dana Gas and Crescent petroleum

Dana Gas PJSC, the Middle East's leading private-sector natural gas company, and Crescent Petroleum, the Middle East's oldest private oil and gas company, in their capacity as joint operators, have announced that the total investment on behalf of the partners in gas operations in the Kurdistan Region of Iraq has exceeded US$1 billion. Total cumulative petroleum production from inception to date has now reached 79 million barrels of oil equivalent from continuous production from the Kor Mor field for the past four and a half years, making it the largest investment and highest level of cumulative production achieved by private companies in Iraq's oil and gas sector. Daily production reached a peak rate of 88,000 barrels oil equivalent per day (boepd), averaging 80,000 boepd, which includes 340 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids. Total investment by the partners until end of February 2013 stood at $1,004 million, since entering into agreements with the Kurdistan Regional Government for the Kor Mor and Chemchemal blocks in April 2007, and there are plans for further expansion in investment and production levels, under discussion with the Ministry of Natural Resources. In total, more than 375 billion cubic feet of gas and 16.5 million barrels of condensate and liquids have been produced by the companies since the start of production in October 2008, with the gas supply to local power stations enabling 1,750 MW of new electricity generation for the Kurdistan Region. This has ensured almost continuous power supply for 4 million people in the Kurdistan Region, in contrast to the electricity crisis in other parts of Iraq, and provided $9.1bn of savings in fuel costs for the government, with annual savings of $3.3bn going forward and major environmental benefits in cutting greenhouse gas emissions while transforming and energizing the economic and social development of the entire region at the same time. "As regional companies who pride ourselves on moving quickly to address local needs, Dana Gas and Crescent Petroleum are proud to have delivered these important results, which are also a testament to the policies of encouraging private investment and local development that have been applied in the Kurdistan Region of Iraq," said Majid Jafar, CEO of Crescent Petroleum and Member of the Board of Dana Gas. "In addition we are receiving more regular payments for our products, and are working with the KRG to resolve the outstanding receivables as soon as possible." Marking the important investment milestone, Rashid Al-Jarwan, Executive Director and Acting CEO of Dana Gas, said: "We thank the KRG for their cooperation and support in achieving this milestone, as well as our partners, contractors and all of our staff. We are working with the KRG Ministry of Natural Resources on the next phase of development and expansion, and look forward to growing our operations and investment to enable further progress and prosperity for the local community." During the project's construction phase, work opportunities were provided for over 2,000 Iraqi workers from all ethnic groups and sects, supported by expatriate workers from over 20 nationalities in the region and worldwide. Currently employing 460 full-time employees in the Kurdistan Region, the companies have successfully implemented a nationalization programme, already achieving over 80% local staff ratio in their operations while implementing a major training programme. The many notable technical achievements of the project include: achieving first gas in a record time of only 15 months, the installation of a 180km gas pipeline across challenging mountainous terrain that required the clearing of minefields; installation of new gas processing plantdrilling successfully to tertiary reservoir formations at depths of 2,300 meters, importing and installing over 64,000 tonnes of equipment in over 3,500 truck-loads, with pipe material supplied from China and Thailand, and the state-of-the-art gas processing plant imported from the USA. Crescent Petroleum and Dana Gas have also implemented a corporate social responsibility programme to support the local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24 hour electricity for the local villages, mobile medical units, and youth sports facilities. These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital in the Kurdistan Region.