Uninsured Black Sea gas platform launched off Romania

A new Black Sea offshore gas platform was officially launched off Romania on Tuesday June 29th, reportedly uninsured and uncovered for war risk, reports Reuters.

The project by Black Sea Oil & Gas (BSOG), controlled by US private equity firm Carlyle Group LP CG.O, is Romania’s first offshore Black Sea development in three decades. BSOG said it planned to extract 1bn m/3 of gas per year, or roughly 10% of Romania’s consumption. The platform is 120km offshore and is located some 45 km from Ukraine’s Snake Island, currently occupied by Russia. BSOG CEO Mark Beacom told reporters that had an impact.

“We are not in a war zone, but we are close enough and it clearly has an impact. We’ve had mines detected close to the platform, we’ve had warships that go close to our platform and we’ve had airplanes circling our platform,” he said. “But recall we started this project when none of this existed.”

Beacom said that the platform has no insurance. “You can’t get insurance after war starts, so, yeah, we are taking that risk,” he said, without going into more detail.

After years of stalling, Romanian lawmakers amended legislation in May, reducing a previous punitive tax and removing export restrictions. They hoped to unlock investment in the Black Sea, where the country has an estimated 200 billion cubic metres of gas.

Beacom said the changes to the Romanian offshore gas tax were welcome, but had not fully met BSOG’s expectations. He said that the company moved forward with the project on government assurances the tax would be repealed.

While the tax has been lowered, Beacom said the company had started a process to take the government to the International Court of Arbitration in Paris. It was currently assessing whether to proceed with that.

“It has been helpful …but it isn’t to the extent that we believe we have a legal right,” Beacom said about the law. “Whether we move forward with the arbitration we’ll see, it’s still there and we’re assessing it.”