Black Sea Oil and Gas (BSOG) is extracting natural gas at a rate of 3 mln cubic meters per day - the equivalent of 1 bln cubic meters per year - from the Midia Gas Development (MGD) perimeter in Romania's offshore, the company's CEO Mark Beacom announced.

The company hasn't abandoned the arbitrage process initiated earlier this year, even if Romania amended the Offshore Law. The tax on windfall revenues was revised, Beacom admitted, but not enough.

"We filed for arbitration. We will decide whether to continue, for the time being, the process is going on. We are evaluating [the revised Offshore law]," he stated, according to Economica.net.

In February 2019, BSOG, a company controlled by the US investment fund Carlyle, announced the final investment decision for the Midia Gas Development project (MGD project), located in the Romanian Black Sea area, where it said it would invest USD 400 mln.

The final investment decision was taken in good faith, based on assumptions that BSOG and its partners will be able to restore all their rights, in the sense of eliminating any additional taxes and contributions, as well as any restrictions on free trade of their gas on a fully liberalized market, according to European legislation, the company had announced at that time.

The Offshore Law was amended this year, but the tax on windfall revenues was maintained - even though the terms were sweetened in favour of the investors.

OMV Petrom, which operates another significant offshore perimeter in Romania's Black Sea, has not decided yet whether the revised Offshore Law is supportive of the investment in the production stage.

andrei@romania-insider.com

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