OMV sues Romania to recover more environmental cleansing expenses

Austrian group OMV seeks to obtain another EUR 32 mln from the Romanian state for environmental cleansing operations covered by its local subsidiary OMV Petrom.

OMV has started a new lawsuit against the Romanian state at the International Chamber of Commerce (ICC) in Paris, where it won a similar action for EUR 58 mln earlier this year, three years after it filed the claim.

"On October 2, 2020, OMV Aktiengesellschaft, as a party in the privatization agreement, initiated arbitration proceedings against the Romanian State, in accordance with the International Chamber of Commerce ("ICC") Rules, in Paris, France regarding certain notices of claims unpaid by the Romanian State in relation to well decommissioning and environmental restoration obligations amounting to EUR 32 mln," OMV wrote in its quarterly report released last week.

In 2004, when Romania sold its state oil company Petrom to the Austrians, the Government agreed to pay OMV the costs related to closing old wells and greening the sites over a period of 30 years, estimated at over EUR 0.5 bln.

However, the Romanian Government has been late in paying the bills received from OMV. OMV took 51% of Petrom in 2004 in a deal worth EUR 1.5 billion, out of which the state got EUR 668 million while EUR 832 million went into the company via a capital increase.

OMV, which holds 51% of OMV Petrom, has already recovered its initial investment from dividends. The Romanian state still holds a 20.64% stake in the company.

(Photo: omvpetrom.com)