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Court battle looms to rescueoil rig 'held hostage by Iran'

18 Aug 2006

Abu Dhabi: Romanian drilling company Grup Servicii Petroliere (GSP) says it will drag Petro Iran Development Company (Pedco) all the way to the International Court of Justice in The Hague to recover its second oil rig which it claims is being held hostage in Iranian waters.

GSP has also called Pedco's delaying tactics and its violation of international rules an act of piracy, saying it would no longer deal with the National Iranian Oil Company (NIOC), Pedco's parent company, through brokers.

"We plan to go right up to the International Court of Justice in The Hague to defend our rights if Pedco does not release our rig Orizont that is held hostage in Iranian waters, after the termination of the contract in April 2006," Gabriel Comanescu, President of GSP, told Gulf News.

"Pedco's delay on the issue is akin to piracy that will bring down the reputation of NIOC and we will cooperate with NIOC for future contracts only directly and not through an imposed broker."

On Tuesday, GSP managed to move one of its rigs, Fortuna, to Sharjah, saying it was perfectly within its rights and refuted Pedco's charges that GSP hijacked the rig.

Fortuna was moved in accordance with a court decree from Qeshm Island and an implementation order from Hengam Island security forces hand delivered to Pedco. But the second rig, Orizont, is still under Pedco's control, says GSP.

"It is ridiculous that Pedco is obstructing the clearance documents for the tugboats and all the shipping agents are afraid to lose business from Pedco if they cooperate with GSP. How can it take three months to implement safety procedures? We even offered to do the safety procedures in line with international norms," said Comanescu.

The rigs were hired by Dubai-based Oriental Oil Co and further rented to Pedco without the consent of GSP. Oriental Oil Co, as discovered later by GSP, never existed and had falsified papers.

Comansecu said his company suffered damages of some $70 million since April due to this problem with Pedco. Each of the rigs cost $140 million.

"We hope the Iranian authorities take immediate action for the illegal obstruction of the rig and safety of the crew on board. With such behavior, it is no wonder international companies are not participating in NIOC tenders."

A Dubai-based energy and offshore consultant said this was a simple contractual dispute and a court would give its decision based on the contract.

"In any country this case would have been settled easily. But Iran has stood alone for a long time and we don't know how things function there."

Meanwhile, the Arbitration Court at the International Chamber of Commerce in Paris has started examining the case, said Comanescu.

© Gulf News 2006. All rights reserved.