BSOG may seek international arbitration about its offshore operations in Romania

Black Sea Oil and Gas (BSOG), an oil company controlled by Carlyle Group that is close to becoming the first of the new gas producers in Romania's Black Sea, possibly this summer, notified the Romanian state of its intention to initiate an international arbitration process at the Paris Court.

The company did its part of the job and is ready to extract natural gas at a critical moment, but it expects the Romanian state to keep its promise as well, sources familiar with the developments told Economica.net.

Romania's ruling coalition says it is close to coming up by the end of this week with a revised Offshore Law - actually as part of a broader amendment of the legislation to include the onshore perimeters.

But it wouldn't be the first delay if it fails. In February 2019, BSOG announced the final investment decision for the Midia Natural Gas Development Project (MGD Project) in Romania's Black Sea area - a decision that has been constantly delayed by OMV Petrom in the case of its similar (but larger) project.

"The final investment decision was made in good faith," BSOG said at that time - and three years later, it is able to extract "the first molecule of gas" from the perimeter it operates.

It is estimated that BSOG will extract one billion cubic meters of gas from the Black Sea field for ten years. It is not critical for Romania's ten bln cubic meters annual consumption, but it matters.

In the meantime, since 2019, the Romanian Government has constantly delayed approaching the topic openly.

Even if settled by the end of this week, the new Offshore Law will not be the outcome of open debates and transparent negotiations. It will most likely remain subject to political accusations, speculations and contestations.

What BSOG seeks now is, on the one hand, a fair implementation of the EU regulations but, on the other hand, "the cancellation of additional taxes" that "affects us a lot."

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