- Pakistan Petroleum Limited (PPL) has announced that its subsidiary, PPL Asia E&P B.V, reached a mutually favourable settlement with Iraq’s Midland Oil Company.
- Midland Oil Company intimated the termination or expiry of the Exploration, Development, and Production Service Contract (EDPSC) in FY22, advising PPL Asia to settle all outstanding liabilities and receivables and to initiate close-out proceedings.
- Hence, PPL Asia took all necessary steps to complete the close-out process, and a claim was lodged for reimbursement of specific costs and interest.
- As per the latest announcement, PPL Asia and Midland Oil Company have reached a settlement agreement, under which Midland Oil Company will pay USD 6mn (PKR 1,665mn) or PKR 0.61/share to PPL Asia via a third party.
- This settlement concludes all matters related to the EDPSC at Block-8 in Iraq.
- To recall, PPL Asia was awarded the license for the EDPSC for Block-8 in Iraq in 2012.
- Drilling was initiated in Apr’19 at Block-8’s Madain-1 well, which led to the discovery of a sub-commercial volume of oil in FY20.
- Consequently, the well was plugged and abandoned.
Courtesy – AHL Research