December 6, 2023 ZENITH ENERGY LTD. ("Zenith" or the "Company") ICC Arbitration for SLK againstTunisia Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA; OTCQB: ZENAF), the listed international energy production and development company, announces that its fully owned subsidiary,Canadian North Africa Oil and Gas Limited ("CNAOG") has initiated an ICC (International Chamber of Commerce ) arbitration case seated inParis against theRepublic of Tunisia (the "CNAOG ICC Arbitration"). Background As announced by the Company onNovember 22, 2021 ,Zenith Overseas Assets Holdings Ltd ("ZOA"), a fully owned subsidiary of Zenith, entered into a share purchase agreement to acquire a 100% interest in the issued, allotted, outstanding and fully paid-up share capital of CNAOG, previously namedCNPC International (Tunisia) Ltd , a then subsidiary ofChina National Petroleum Corporation , one of the largest state-owned energy companies in the world (the "Acquisition"). CNAOG held an undivided 22.5% interest in the North Kairouan permit and the Sidi El Kilani Concession inTunisia ("SLK" or the "Concession"), as well as still owning 25% of the issued share capital of Compagnie Tuniso-Koweito-Chinoise de Pétrole ("CTKCP"), the operating company of SLK. For reasons unknown to the Company and devoid of any legal grounding, the Tunisian State represented by theMinistry of Industry, Mines and Hydrocarbons arbitrarily refused to recognise the Acquisition of CNAOG, which was performed in accordance with all applicable laws and duly notified to the local authorities. It is to be underlined that the Ministry's position is in contravention of established precedent, including the acquisition ofEcumed Petroleum Tunisia Ltd , which holds a 100% interest in the Robbana and El Bibane concessions byCompagnie Du Desert Ltd ("CDD"), a fully owned subsidiary of Zenith, announced onApril 30, 2021 , as well as the acquisition ofEcumed Petroleum Zarzis Ltd ("EPZ"), which held a 45% interest in the Ezzaouia concession and still owns 50 percent ownership of MARETAP, the joint operating company for the Ezzaouia concession, first announced onMarch 15, 2021 . Claim The Company's is pleased to confirm that it has formalised a claim for damages in the amount ofUS$85.8 million (the "Claimed Amount") in connection with the CNAOG ICC Arbitration. The Claimed Amount has been assessed by a third-party expert consultant in consideration of the following: o CNAOG's lost production revenue and associated profitability, during a period of high energy prices, from the SLK Concession until its initial expiry inDecember 2022 o The volume of crude oil produced from the Concession and allocated to and received by CNAOG upon the completion of the Acquisition o Unpaid invoices for oil production by ETAP, the national oil company ofTunisia . o The value of the 45% interest in the renewal of the SLK Concession, representing a breach of CNAOG's right to renew its previously existing 22.5% interest in SLK, as well as the 22.5% interest held byKuwait Foreign Petroleum Exploration Company K.S.C.C , which relinquished its interest in the Concession before its initial expiry. The Company wishes to clarify that the CNAOG ICC Arbitration is being performed in parallel to the ICC Arbitration against ETAP, announced to the market onNovember 1, 2023 , for a total amount ofUS$6.5 million , and to the arbitration pending before theInternational Centre for Settlement of Investment Disputes inWashington DC ("ICSID Arbitration") , for a total cumulative claimed amount of at leastUS$48 million , announced to the market onJune 7, 2023 , following various breaches of bilateral trade agreements committed by theRepublic of Tunisia .Andrea Cattaneo , Chief Executive Officer, commented: "It is again regrettable that we have been compelled to seek legal redress by way of our third arbitration in connection with our Tunisian assets for the very material commercial harm we have suffered because of the arbitrary conduct of the Tunisian authorities.Zenith Energy is one of the few energy companies that invested inTunisia in recent years during a period when most energy companies, irrespective of size, were actively seeking to leave the country. The Board is fully confident in the merits of the CNAOG ICC Arbitration and will take all necessary action to ensure shareholders are fully compensated for the damage they have sustained." Notes to Editors:Zenith Energy Ltd. is a revenue generating, independent energy company with production, exploration and development assets inNorth Africa andEurope , including electricity generation inItaly . The Company is listed on theLondon Stock Exchange Main Market (LSE: ZEN), the Euronext Growth of theOslo Stock Exchange (OSE: ZENA) and the Venture Market of the OTCQB (OTCQB: ZENAF). Zenith's strategic focus is on pursuing development opportunities through the development of proven revenue generating energy production assets, as well as low-risk exploration activities in assets with existing production. For more information, please visit: www.zenithenergy.ca Twitter: @zenithenergyltd LinkedIn: https://bit.ly/3A5PRJb Market Abuse Regulation (MAR) Disclosure The information included in this announcement is defined as inside information pursuant to MAR article 7 and is publicly disclosed in accordance with MAR article 17 and section 5 -12 of the Norwegian Securities Trading Act. The announcement is made by the contact person.
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