Friday, August 25, 2006

Lawyers Go to Iran to Negotiate Romanian Rig Handover

Adam Smallman, Dow Jones Newswires:
Lawyers for Romanian oil services company Grup Servicii Petroliere, or GSP, are on their way to Tehran to negotiate a release of an oil rig that has been taken over by Iranians, a company spokesman said Thursday.

U.S.-based spokesman Stefan Minovici told Dow Jones Newswires that lawyers will be arriving in the Iranian capital at the weekend to work with local lawyers on taking back what he says is a $150 million oil rig seized this week in the Persian Gulf by Iranians dressed in military uniforms.

GSP's Orizont oil rig is some 18 kilometers off the coast of Iran and the company says it came under fire from an Iranian navy ship and was later occupied by Iranian troops, a claim denied by Iranian government officials.

Minovici, founder and president of New York-based investor relations firm MIC & Associates, which specializes in Romania, said GSP is "hoping for a diplomatic resolution to this conflict and that truth and reason will prevail."

GSP, he added, has done nothing wrong.

He said three Iranians on the rig are armed and two are representatives from an oil company from Iran's Kish Island, a free trade zone.

Minovici said Iranians continued to occupy the rig, which has 27 crew on board who have no means of leaving the structure because a blockade is in place.

Iran's ambassador to Romania, Ali Akbat Farazi, has said the rig was boarded by police to enforce a court order that the rig should remain in Iranian waters pending the resolution of a commercial dispute.

The Iranians and GSP have been embroiled in a dispute since April which resulted in the rig being shut down around 10 days so that GSP could prepare it for departure, Minovici said.

The Romanian company appeared in Iranian courts earlier this year over the contractual dispute and said it had received a judgment in its favor.

Following the judgment, GSP last week towed another rig, Fortuna, out of Iranian waters back to Sharjah in the United Arab Emirates.

Minovici said GSP had never signed a contract with an Iranian company or government that had anything to do with Iran, only with the Dubai-based Oriental Oil Co.

"We're guilty of perhaps using poor judgment" and failing to carry out due diligence before getting involved with Iran, he added. READ MORE

GSP, a private Romanian company established in 2004, operates six offshore rigs it bought from Petrom SA, Romania's largest oil company.

The two rigs were operating near the Iranian coast in the Persian Gulf as part of a deal signed between GSP and the Dubai-based Oriental Oil Co.

However, GSP says it hasn't been paid for any work and is owed $17 million in lost revenues and legal fees.

The Orizont jack-up rig was built in 1987 and can produce up to 300,000 barrels a day of oil.

-By Adam Smallman, Dow Jones Newswires; +44 (0) 20 7842 9343;