Sterling Resources Deplores Romania’s Opaque Drilling Permission System

04.28.2011 By Andrei Circhelan

Canadian oil and gas company Sterling Resources on Thursday said it cannot operate in its Black Sea perimeters at the present time, since local authorities are unable or unwilling to issue the required permits.

Canadian oil and gas company Sterling Resources on Thursday said it cannot operate in its Black Sea perimeters at the present time, since local authorities are unable or unwilling to issue the required permits.

"Sterling has thus issued a notice to (mineral resources watchdog) ANMR, 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 company said in a statement.

The company obtained earlier this year the environment and drilling permits needed for operations in the Midia and Pelican perimeters of the Black Sea. However, a law issued in 2009 states companies need permission for specific 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," the document reads.

The Canadian company added that, under the lease contract, the ANMR has 15 days to agree with the invocation of force majeure, the effect of which would be to extend the duration of the lease contract, or reject the invocation putting the two parties into a dispute resolution procedure which could ultimately be decided in international arbitration.

Sterling Resources is drilling in UK, Romania and France.