07:39 AM EDT, 04/26/2024 (MT Newswires) -- Alvopetro Energy ( ALVOF ) requested an emergency arbitration before the International Court of Arbitration of the International Chamber of Commerce (ICC) over the redetermination of working interests in the "unitized" area that includes Alvopetro's Cabure natural gas field in Brazil.

The Cabue natural gas discovery extends across two blocks with two adjacent blocks owned by another company. Under Brazilian law, petroleum straddling two or more licensed blocks must undergo "unitization," or pooling, to ensure efficient and fair development. Under the 2018 Unit Operating Agreement, Alvopetro's initial working interest share of the unitized area was 49.1% with the company's partner named initial operator with the remaining 50.9%. The working interest split was subject to redeterminations.

On April 5, an independent expert appointed by Alvopetro and its partner found in favour of a proposal by Alvopetro's that increased the company's working interest in the unit to 56.2%, effective June 1. Alvopetro's entitlement to natural gas production from the unit would increase to 13.9 MMcfpd per day (before additional natural gas liquids volumes), compared with average 2023 natural gas production from the unit of 11.7 MMcfpd per day.

Alvopetro's partner in the unitization requested clarifications, which Alvopetro says it provided. A week later, Alvopetro received a notice of dispute from the partner seeking to block the changes in the two companies' working interest.

Alvopetro said "strongly" disagrees with its partner since the original operating agreement makes clear that the decision of the expert is binding.