Despite announcing last week that it would invest USD 400 million to start natural gas extraction at its offshore field in Romania’s Black Sea section, Black Sea Oil and Gas (BSOG), controlled by the major US investment fund Carlyle, it is ready to sue the Romanian Government to protect its rights.
"Although we are committed to developing the project, we will, in parallel, take steps to restore all our rights in terms of tax provisions, gas trade rights and other regulatory issues that altogether undermine the viability of gas project development in the Black Sea," BSOG CEO Mark Beacom told local Profit.ro.
After the offshore law compelled investors to sell half of their output on the local market and pay higher taxes and duties, the emergency ordinance 114/2018 capped the natural gas price (including for offshore producers) and further levied an extra 2% turnover tax making investments, particularly the costly offshore projects, even less attractive.
BSOG still looks forward to having a constructive dialogue with the competent authorities to resolve these issues, but it does not rule out the possibility of taking legal action if these talks don't have a positive outcome. Beacom explained that last week’s decision was rather not to abandon the investments made so far. The investors still expect to start production in the first quarter of 2021, he announced.
OMV Petrom needs fiscal stability, a free gas market and infrastructure to start the Black Sea gas project and the...