OMV starts case against Romania at International Arbitration Court

Austrian group OMV, which controls the biggest Romanian oil & gas producer OMV Petrom, has started a case against the Romanian state at the International Court of Arbitration in Paris. OMV is looking to recover EUR 34 million worth of environmental costs related to the decommissioning of old wells and decontaminating the respective sites, the group announced in its annual report for 2016. According to Petrom’s privatization contract OMV and the Romanian Government signed in 2004, the state agreed to pay OMV the costs related to the closing of old wells and greening the sites over a period of 30 years. The Austrian group agreed to gradually carry out this process and be paid by the Romanian state. However, OMV claims that the Romanian state has been late in paying some EUR 34 million worth of environmental costs, despite repeated notifications. The group thus decided to initiate the arbitration proceedings against the Romanian state to recover the money. The total sums that Romania should pay to OMV for the closing of old wells are estimated at EUR 542 million, to be paid until 2034, according to the Austrian group’s annual report. Since the privatization, OMV Petrom has sent reimbursement requests worth some EUR 86 million to the state, of which the state has only paid some EUR 18 million, according to a document OMV provided to local Mediafax. OMV took 51% of Petrom in 2004 in a deal worth EUR 1.5 billion, out of which the state only got EUR 668 million while EUR 832 million went into the company via a capital increase. OMV has already recovered the money paid to the Romanian state for Petrom from dividends. The Romanian state still holds a 20.64% stake in the company. editor@romania-insider.com