Sterling Resources declares Force Majeure on its Black Sea concessions in Romania

Canadian oil and gas company Sterling Resources has declared Force Majeure on its Midia and Pelican Blocks in the Black Sea in Romania after the company has been unable to undertake petroleum operations due to construction permitting issues, which are beyond its control, it has announced. In early 2011, after extensive and lengthy efforts, the company finally obtained from the relevant Governmental authorities the environmental and drilling permits necessary for operations on the Midia and Pelican Blocks, according to Sterling. The National Agency of Mineral Resources ("NAMR") has given approval to a 2011 work program based on which Sterling has to undertake certain offshore activities. These include the drilling of 2 offshore wells, acquiring 1,050 linear kilometers of 2D seismic and undertaking investigations and studies to bring the Ana and Doina discoveries forward for development. However, in July 2009 the Romanian Parliament passed a law requiring construction permits for certain offshore activities. “Sterling has sought clarification of this requirement from relevant authorities, as the activities contemplated under the 2011 work program clearly appear to have aspects that will require a construction permit. It is Sterling's view that, after having received responses from certain relevant governmental authorities, that the authorities are currently unable or unwilling to provide construction permits for offshore oil and gas activities,” according to the company's statement. “The effect of this situation, which the company views as political in nature, is to render it impossible for the company to undertake petroleum operations at the present time. Sterling has thus issued a notice to NAMR, stating that the total lack of clarity on the applicable procedure and authority for issuance of construction permits constitutes an event of Force Majeure under the Concession Agreement,” the statement goes on. "Despite this unfortunate situation we look forward to working with the NAMR and other Romanian authorities to find a resolution that will allow the company to fulfill its obligations, preserve its rights and ultimately achieve success for the company and the people of Romania,” said Mike Azancot, Sterling's Chief Executive Officer. Sterling Resources Ltd. is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands. The shares are listed and posted for trading on the TSX Venture Exchange under the symbol "SLG". editor@romania-insider.com