Ljubljana related

23 Mar 2021, 12:46 PM

STA, 23 March 2021 - The British company Ascent Resources has announced it will initiate arbitration proceedings against Slovenia over the dispute over permits for the extraction of gas by means of hydraulic fracturing in Petišovci (NE), after the state had failed to set forward a damages proposal. The company has estimated damage to be in excess of EUR 100 million.

Claiming that Slovenia is breaching its obligations to the detriment of the company's investments in Slovenia, procedures to start an investor dispute at international arbitration were formally started by Ascent Resources last July.

This could not happen before a three-month period has passed in which the parties would have the opportunity to settle the dispute amicably.

The two sides entered negotiations last October, but the British company said this would not prejudice its rights to pursue its investment treaty claim under the UK-Slovenia bilateral investment treaty and the Energy Charter Treaty.

The deadline for a possible settlement in the direct negotiations had been set for 19 March this year.

The latest announcement from Ascent Resources comes after the State Attorney's Office told the STA last Saturday that Slovenia had rejected an amicable settlement with the company as the deadline for the decision expired on Friday.

The British company said on its website it "intends to initiate arbitration proceedings against the Republic of Slovenia" and "confirms that an amicable settlement is presently not achievable."

It added that as part of direct pre-arbitration settlement discussions, it had "submitted a damages calculation to the state totalling significantly in excess of EUR 100 million."

The Slovenian Environment Agency issued a decision in March that an environmental impact assessment is needed before a permit can be issued for extraction of gas in Petišovci by re-stimulating two currently producing wells as planned by Ascent Resources and its Slovenian partner Geoenergo. The decision was upheld by the Administrative Court in June this year.

Ascent Resources said in the same release that "it is ultimately expected that the pressure at PG-11A will decline to unsustainable levels without mechanical stimulation (which forms part of the damages claim against the state)."

However, it added that it was pleased PG-11A was currently producing and that it intended to continue production whilst it was possible to do so.

All our stories on Ascent Resources and Slovenia

18 Mar 2021, 10:43 AM

STA, 18 March 2021 - The newspaper Delo reported unofficially on Thursday that Slovenia was not to accept a settlement with the British company Ascent Resources over the dispute over permits for the extraction of gas by means of hydraulic fracturing in the north-east of the country.

The two sides entered negotiations last October, but the British company said this would not prejudice its rights to pursue its investment treaty claim under the UK-Slovenia bilateral investment treaty and the Energy Charter Treaty.

Claiming that Slovenia is breaching its obligations to the detriment of the company's investments in Slovenia, Ascent Resources formally begun procedures to start an investor dispute at international arbitration.

According to Delo, the deadline for Slovenia to announce its decision runs out on Friday, and the State Attorney's Office told the newspaper that Slovenia would inform the other party about its viewpoint within the agreed time.

"Since the negotiations about a possible solution of the dispute with a mutual agreement are still confidential, we are not able to provide more information," it added.

The negotiations are being held as a damages lawsuit by Ascent Resources is looming, with the company, according to Delo, expected to demand EUR 120 million in compensation.

The company alleges that through Slovenia's violation of its obligations under the two treaties, it has sustained considerable harm, as it has invested more than EUR 50 million in the development of the Petišovci oil and gas field.

The Slovenian Environment Agency issued a decision in March that an environmental impact assessment is needed before a permit can be issued for extraction of gas in Petišovci by re-stimulating two currently producing wells as planned by Ascent Resources and its Slovenian partner Geoenergo. The decision was upheld by the Administrative Court in June this year.

All our stories on Ascent Resources and Slovenia

11 Jan 2021, 08:51 AM

STA, 9 January 2020 - The government has drafted mining act changes, under which high-volume fracking would be prohibited in Slovenia. The changes also lay down conditions for low-volume fracking. This comes after several unsuccessful attempts by opposition parties to ban fracking altogether.

The changes draw the limit between low-volume and high-volume fracking at 1,000 cubic metres of water per fracking phase or 10,000 cubic meters per entire fracking procedure.

While high-volume fracking would be banned, low-volume fracking would be allowed under several conditions, including that all ingredients in the fracking fluid and proppants must be known and approved for use in Slovenia.

Moreover, there can be no surface outflow of pollutants and they must not pollute the soil, water or air. Pollutants on the surface must be handled according to relevant rules, and must not contaminate underground water.

What is more, fracking must not come into contact with an aquifer and must not cause damage to other activities near the drilling wells.

Answering a question from the opposition earlier this week, Infrastructure Minister Jernej Vrtovec said that the changes "are substantially more restrictive than the provisions proposed by the European Commission," because the latter does not find low-volume fracking dangerous and does not regulate it.

"The technological method, just like any dangerous technological in the industry, will be safe for the people, the environment and nature," Vrtovec said in written answer to SocDems MP Dejan Židan.

The changes were put up for public consultation by the Infrastructure Ministry two weeks ago and stakeholders have until 22 January to comment.

The British company Ascent has been trying for years to get approval for fracking in Petišovci, NE, while left-leaning parties have attempted to get fracking banned three times.

20 Nov 2020, 12:55 PM

STA, 20 November 2020 - A renewed attempt by the opposition to ban the extraction of natural gas through hydraulic fracturing in Slovenia, was rejected in a 39:40 vote in parliament on Friday. While some coalition members agree with a ban, they want to wait for what was described as comprehensive solution being drawn up by the Infrastructure Ministry.

While the first motion to amend the mining act with a ban on what is also known as fracking, tabled by the opposition Left, was rejected at committee level last month, the renewed attempt, coming from the four left-leaning opposition parties, was rendered unfit for further reading at Friday's plenary.

Thursday's discussion saw the Left's Nataša Sukič highlight the dispute with British company Ascent Resources, which she said has been pushing to introduce fracking at the Petišovci gas field in the north-east of Slovenia for decades.

Ascent Resources has begun procedures for an investor dispute against Slovenia over the decision of Slovenian authorities that an environmental impact assessment is needed before any permits can be issued for hydraulic fracturing.

While Sukič spoke of a "dirty technology that is also proving abroad as destructive for the environment and the health of local populations", the government disagrees with the proposed changes, which also stipulate that already issued permits and mining rights and applications for them would need to be "coordinated" with the ban as well.

Infrastructure Ministry State Secretary Blaž Košorok argued that the motion was not worded appropriately and did not take into account the consequences of interference with obtained rights to use hydraulic fracturing to extract hydrocarbons, for which an environmental impact assessment needs to be conducted.

Franci Kepa of the senior coalition Democrats (SDS) said strategies needed to be thought through carefully also because of responsibilities toward potential investors in this field.

"The Infrastructure Ministry has been drawing up changes to the mining act for some time...It is not good to change the act just because of a single issue; instead, a comprehensive and complex approach is necessary," Kepa said.

A similar view was taken by other coalition parties, although the Pensioners' Party (DeSUS) and the Modern Centre Party (SMC) expressed support for a ban in principle, while Mihael Prevc of New Slovenia (NSi) argued hydraulic fracturing should be discussed by experts and not politics.

Gregor Perič of the SMC spoke of "a strange case of amnesia" on the part of those forgetting that the mining act and Slovenia's mining strategy consider hydrocarbons as resources of strategic importance. He added the changes proposed by the opposition brought more questions than answers.

All opposition parties begged to differ, rejecting the systemic or comprehensive solution argument and highlighting the right of the inhabitants of Petišovci to live in a healthy environment.

"We find it nonsensical for such a good legislative proposal to be rejected merely on the basis of the excuse we are waiting for a systemic of comprehensive solution," Soniboj Knežak of the SocDems said.

"The company wanting to frack in Petišovci comes from the UK, where fracking is banned. It has also been banned in France, Germany, Ireland as well as Bulgaria, and it is high time that this invasive and dangerous method...also be banned in Slovenia," Knežak added.

23 Oct 2020, 10:10 AM

STA, 22 October 2020 - British company Ascent Resources has entered into direct negotiations with Slovenia in a bid to potentially settle the dispute over permits for the extraction of gas in the north-east of the country.

In an announcement made in a filing with the London Stock Exchange, Ascent Resources says the negotiations will be carried out on a strictly confidential basis.

The company says the negotiations will not prejudice its rights to pursue its investment treaty claim under the UK - Slovenia bilateral investment treaty and the Energy Charter Treaty.

Claiming that Slovenia is breaching its obligations under the two treaties to the detriment of the company's investments in Slovenia, Ascent Resources has formally begun procedures to start an investor dispute against Slovenia at international arbitration.

The request for arbitration cannot be entered after the expiry of a three-month period in which the parties can try to solve the dispute amicably.

According to explanations recently provided by the Slovenian State Attorney's office, request for arbitration can be filed after 23 October unless the dispute has been resolved by then. This is because the official notification on the existence of the dispute was handed to Slovenia on 23 July.

The company alleges that through Slovenia's violation of its obligations under the two treaties, it has sustained considerable harm, considering it has invested more than EUR 50 million in the development of the Petišovci oil and gas field.

The Slovenian Environment Agency issued a decision in March that an environmental impact assessment is needed before a permit can be issued for extraction of gas in Petišovci by re-stimulating two currently producing wells as planned by Ascent Resources and its Slovenian partner Geoenergo. The decision was upheld by the Administrative Court in June this year.

All our stories on Ascent Resources and Slovenia

10 Sep 2020, 11:47 AM

STA, 9 September 2020 - The UK-based company Ascent Resources has formally begun procedures to start an investor dispute against Slovenia at international arbitration for taking measures to protect its groundwater from fracking, the NGO Friends of the Earth has announced.

On its website, the NGO released a letter addressed to Prime Minister Janez Janša, Foreign Minister Anže Logar and Environment Minister Andrej Vizjak on 23 July by the London law firm Enyo Law, which says it represents Ascent.

In the letter Ascent formally notifies the existence of the dispute, while also expressing willingness for negotiation in "hope that an amicable solution can be found to the present dispute".

The letter alleges actions by Slovenia in breach of its obligations under the UK-Slovenia bilateral investment treaty and the Energy Charter Treaty, which it alleges caused considerable harm to the investors' investments in Slovenia.

They say the investors have invested sums in excess of EUR 50 million in the development of the Petišovci oil and gas field.

Enyo Law alleges that the Environment Agency (ARSO) has missed deadlines in issuing its decision on the application for a screening assessment, and that its decision that an environmental impact assessment was required was at odds with with opinions issued by other Slovenian government authorities and institutions.

"The ARSO decision was not based on the recommendations of Slovenia's own experts and, furthermore, it contradicted the opinions they gave. It is therefore manifestly arbitrary and unreasonable," reads the letter.

The law firm also says that while the procedure at ARSO was ongoing, the Slovenian minister of the environment and spatial planning repeatedly made public statements portraying Ascent and the Petišovci project in a negative light, and that leaks were made by ARSO to the press.

The letter says that this "further demonstrates that ARSO was biased against the investor and that the ARSO decision was politically motivated".

With the letter, investors formally consent to submit their investment dispute with Slovenia to international arbitration, which is considered a formal notification of the existence of the dispute.

"We sincerely hope that an amicable solution can be found to the present dispute, and will welcome any constructive proposals you may have," reads the letter, adding that Ascent is "ready to engage at a senior level" with the Slovenian government.

Friends of the Earth note that several EU countries have banned or introduced moratoria on fracking, including Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, France, Germany, Ireland, Italy, Lithuania, Luxembourg, Netherlands, Spain, Slovakia, and Sweden.

ARSO issued a decision in March that an environmental impact assessment is needed before a permit can be issued for extraction of gas in Petišovci in the north-east of the country by re-stimulating two currently producing wells as planned by Ascent Resources and its Slovenian partner Geoenergo. The decision was upheld by the Administrative Court in June this year.

In 2018 the then Environment Minister Jure Leben ordered internal oversight at ARSO, which found pressure and threats had been exerted on the agency's work and that its independence had been undermined. The findings cost the then director of ARSO Joško Knez his job.

Incumbent Minister Andrej Vizjak has also said that he is not in favour of fracking.

All out reports on Ascent Resources in Slovenia

03 Jun 2020, 13:36 PM

STA, 3 June 2020 - The Administrative Court has upheld the decision of the Slovenian Environment Agency (ARSO) that an environmental impact assessment is needed before any permits can be issued for hydraulic fracturing planned by British company Ascent Resources at the Petišovci gas field in the north-east of Slovenia.

The London-based oil and gas exploration company, which is operating in Slovenia with its partner Geoenergo, announced the ruling on Tuesday.

It added that it is "in the process of beginning preparations for submission of an environmental impact assessment, alongside the stimulation and field development planning which was initiated recently".

ARSO said in March last year that the plans for hydraulic fracturing required an environmental impact assessment and this was confirmed in June last year by the Environment Ministry. Geoenergo therefore turned to the Administrative Court, which has upheld the decision.

"The court decision, along with earlier action by the state, will constitute important evidence to support the claim the company intends to bring against Slovenia under the Energy Charter Treaty," Ascent Resources added on Tuesday in a reference to plans to demand EUR 50 million in damages from Slovenia for delays in the development of the gas field.

Geoenergo, which is co-owned by the Slovenian state-controlled energy companies Petrol and Nafta Lendava and has been striving for the project together with Ascent Resources since May 2017, expressed on Wednesday regret over the court's decision.

It assessed that "an environmental impact assessment is not necessary for the planned intervention, one that has already been executed in past on several occasions in line with Slovenian legislation".

Geoenergo, which spoke of a key project "for the development of north-east Slovenia that would provide greater energy independence for Slovenia", added that the ruling would have negative consequences for "what are already unreasonably protracted administrative procedure that prevent the preservation of the existing production of gas".

Meanwhile, Ascent Resources announced for its investors last week that it would hold on to plans for the re-stimulation of its producing wells in Petišovci. It expects to obtain the necessary permits by the end of the year.

Ascent Resources moreover wrote that it has "observed the recent changes introduced by the new Slovenian government and increasingly confident position on the likelihood of the project receiving the permits required for further stimulation".

All our stories on Ascent Resources and Slovenia

14 Nov 2019, 09:29 AM

STA, 12 November 2019 - Several civil initiatives turned to the OECD over the plans of the British oil and gas exploration company Ascent Resources for hydraulic fracturing in eastern Slovenia. The move comes after the company announced it would demand damages from Slovenia for delays in obtaining a permit for the controversial gas extraction project.

The civil initiatives and organisations filed a complaint on Tuesday with the Slovenian and British national contact points for the OECD guidelines for multinational enterprises, demanding that Ascent Resources fully adhere to the guidelines.

"Given the gravity of the potential harmful effects of hydraulic fracturing adhering to the guidelines could very well mean that Ascent Resources will have to stop these activities immediately," said Lidija Živčič of NGO Focus, one of the 17 participating organisations and initiatives.

They believe Ascent Resources has in many aspects not adhered to the guidelines on corporate social responsibility, especially when it comes to the contribution to sustainable development, as hydraulic fracturing has been found to have multiple negative effects on local environment, people's health and the climate.

According to the civil initiatives, Ascent Resources also violated those guidelines by avoiding the legal constraints and claiming that hydraulic fracturing would not affect the environment.

"Ascent Resources also violated OECD guidelines through inconsistent implementation of due diligence measures and measures to minimise risks, but also by not demanding corporate social responsibility from its affiliate and contractors in Slovenia."

The NGOs claim that this is the first case of a complaint to the national contact point of OECD in Slovenia. "We expect the OECD to recognise the gravity of the violations and demand from the company to strictly implement the guidelines even if that meant Ascent Resources has to stop its fracking activities in Slovenia," Živčič said.

Operating in a joint venture with Geoenergo, which is co-owned by the Slovenian state-controlled energy companies Petrol and Nafta Lendava, the UK company wants to extract gas on a large scale in Petišovci in east Slovenia despite much controversy and problems in obtaining environmental permits.

The company announced this summer it would demand EUR 50 million in damages from Slovenia for delays in obtaining a permit to develop the Petišovci gas field.

It also plans to lodge an investment treaty arbitration claim under the Energy Charter Treaty.

It decided for the move after the Environment Ministry upheld a decision of the Environment Agency that an environmental impact assessment and a separate environmental permit are necessary before the project could start because the location of the gas wells was close to water sources and agricultural land.

All our stories on this case are here

29 Aug 2019, 14:14 PM

STA, 29 August 2019 - The London-based oil and gas exploration company Ascent Resources will demand EUR 50 million in damages from Slovenia for delays in obtaining a permit to develop the Petišovci gas field in the north-east of the country, news portal Litigation Finance Journal reports.

As the British company said in a release on Tuesday, it is preparing "legal claims for damages against the persistent delays in permitting relating to the further development of the tight gas reservoirs in the Petišovci gas field".

Ascent also insists on its appeal against the decision of the Slovenian Environment Agency (ARSO) requiring an environmental impact assessment for the re-stimulation of its producing wells.

In March, ARSO decided that an environmental impact assessment will have to be made to establish whether gas extraction with hydraulic fracturing has no damaging effects on the environment.

"This is definitely a procedure which will change the physical reality of the environment," said ARSO's decision, which was also upheld by the Environment Ministry.

Ascent is also exploring possibilities to further develop the Petišovci gas field without hydraulic stimulation.

According to its press release, it is reprocessing the Petišovci 3D seismic survey acquired in 2008-2009.

It is currently interpreting preliminary data volumes in preparation for a full evaluation of the new seismic volumes, with the final data expected by mid-September.

Its CEO John Buggenhagen said the company planned to work with its partners in Slovenia to also increase production through new conventional drilling opportunities.

Ascent and its Slovenian partner Geoenergo are moreover working on documents to secure an extension of the concession for Petišovci, which is valid until 2022.

All our stories on this issue can be found here

29 Jul 2019, 18:48 PM

The UK’s Ascent Resources, often in the news in Slovenia for its long-running and so far less than successful attempts to exploit it’s Petišovci gas field with the use of hydraulic stimulation, has announced a series of cost-cutting measures and managerial changes. As reported by Morning Star, the moves are an attempt to cut costs by 50%, and are needed because of the delays to the Slovenian project. As the website notes:

In its Slovenian operations, Ascent said it will cut the number of its employees and halt "all non-essential expenditure", including its May order of compression equipment for the Pg-10 and Pg-11A wells.

The company is also changing its CEO, with Chief Operating Officer John Buggenhagen replacing Colin Hutchinson, who will stay with company on a part-time, interim basis as a finance director.

Also leaving the company's board is Cameron Davies, retiring as chair having been a company director since 2010.

The new CEO, a geophysicist who has been working in various capacities at Ascent since January of this year, said: “we continue to pursue an appeal against the Environment Ministry in Slovenia, in conjunction with our joint venture partner at Petišovci, and we are prepared to initiate legal action against the Republic of Slovenia, who we believe is in breach of European Union law.”

Shares in the company were down 12% at 0.26 pence each in London at the close of trading, Monday.

The full report can be seen here, while all our reporting on Ascent Resources is here.

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