Canada’s Sterling Ignorant Of Legal Grounds On Deal Annulment –Official

The deal targets the oil exploration and exploitation of two perimeters in the Black Sea.

"We are not aware of any legal grounds based on which the Romanian Government terminates our contract. Moreover, Sterling Resources has always followed all advice and indications from ANRM on the operational aspects of our operations as well as regarding the other issues in the oil deal," Birrell said in a press statement.

Birrell added the authorities have not notified yet the company on any irregularities.

The president of the National Agency for Mineral Resources Gelu Maracineanu told "Gandul" daily that “very serious” problems were found in the contract with Sterling and he is "sure" this will be terminated.

"Mr. Maracineanu’s statements on «the very serious problems» which ANRM allegedly identified surprised us, considering that we have recently met him and he had not signaled us any worry or concern as regards our deal. Moreover, as far as we know, neither the Premier’s Control Body nor the Parliamentary Commission recently authorized to conduct an investigation on our deal with the Romanian state have not reached a conclusion," Birell said.

Sterling representatives are ready to answer the questions of the parliamentary commission, according to Birell.

According to ANRM, the authorities intend to terminate the deal signed with Sterling, and to resort to the provisions of a deal initially inked in 1992, based on which the state is entitled to 45% of the drilled oil.

“ANRM started an investigation to establish the possibilities to annul the deal signed with Sterling. The checks are doubled by a checkup of the Prime Minister’s Control Body. So far, the conclusions indicate the possibility to terminate the contract, so that we might resort to the provisions of the initial deal inked in 1992," ANRM’s head Gelu Maracineanu told MEDIAFAX on Wednesday.

Romania has, according to the Law on crude oil, the capability to unilaterally terminate the contract with the Canadian company, he added.

Sterling extracts crude oil and natural gas from perimeters Pelican and Midia in the Black Sea.

In 1992, Rompetrol, representing at that time the Romanian authorities, and a consortium made up of Enterprise and Canadian Oxy companies sealed an exploration deal by which Romania received 45% of the crude oil production obtained out of two oil perimeters.

The deal was taken over afterwards by Paladin company and transferred in 1997 to Sterling Resources. In 1993, Rompetrol was privatized and its place in the Sterling deal has been taken by ANRM.

The lease in the Black Sea, granted by the Government in 1992, was extended, successively, by all Romania’s Governments, the decision of the latest Tariceanu Government of November 2008 not changing the content of the agreement.

An appendix of the oil-drilling contract closed between ANRM and Sterling Resources refers explicitly to the dispute between Romania and Ukraine, specifying that the exploration right will become an exploitation one after The Hague Court’s decision.

The International Court of Justice at The Hague drew on February 3 a new maritime border between Romania and Ukraine, settling a 40 year-old dispute. The ruling gives Romania 9,700 square kilometers of exclusive economic zone, accounting for 79.34% of the 12,000 sq km disputed surface, an area said to include about 70 billion cubic meters of natural gas and 12 million tons of oil.

Thus, the Court’s decision and an appendix to the exploration contract give Sterling exploration rights in blocks XIII Pelican and XV Midia in the Black Sea.

By the contract signed between ANRM and Sterling Resources, the Romanian state has allegedly transferred to Sterling the oil and gas resources in the two blocks stipulated in the contract before the decision of the International Court of Justice on the maritime border between Romania and Ukraine.

Romania’s Chamber of Deputies voted early-April the decision draft on allowing the Industries Commission to carry out an investigation regarding the oil agreement of Sterling Resources in the context of the amendments brought to the Oil Law.

Economy Minister Adriean Videanu said Thursday that annulling the contract allowing Canada’s Sterling Resources to exploit hydrocarbons in blocks XIII Pelican and XV Midia in the Black Sea is a right decision and Romania’s largest gas producer Romgaz might represent the country in this deal.