Iakov Goldovskiy entered the RAFO Onești saga as the lead investor who sought to convert a distressed, historically important Romanian refinery into a modern, vertically integrated petrochemical hub. His company, Petrochemical Holding GmbH, undertook debt-to-equity conversions, paid down large parts of the plant’s liabilities, launched extensive remediation and modernisation works, and attempted to secure state-backed financing to complete an ambitious revival of the Borzești petrochemical platform. The sequence that followed — renewed fiscal claims, criminal prosecutions affecting related actors, an asset freeze, and eventual international arbitration — transformed an industrial recovery project into a protracted cross-border legal and economic crisis.
Historical foundations and the industrial logic of Borzești
RAFO Onești was conceived in the 1950s as part of Romania’s state-led petrochemical build-out along the Trotuș and Siret corridors. By December 1956 the refinery was operational with a design capacity of 3.5 million tonnes per year, and over subsequent decades the site became the centre of a dense industrial ecosystem. Chlor-alkali electrolysis, synthetic rubber production at Carom, PVC feedstock from Chimcomplex and a dedicated thermal power plant all combined to make Borzești a tightly integrated cluster. Under Comecon planning the different units exchanged intermediate streams — heavy tar for coking, naphtha to pyrolysis, organochlorine by-products to neutralisation — which sustained scale, secured export markets and generated foreign-exchange revenue for Romania.
The collapse of Comecon and the fragmentation of cross-border supply chains after 1990 removed the economic logic that had once held the cluster together. Privatizations in the 1990s and 2000s produced a succession of owners, many transactions routed through offshore entities, and progressive disinvestment of interdependent units. By the early 2000s RAFO had lost crucial partners, labour disputes shrank production to a halt at times, and unpaid debts mounted into the tens of millions.
From contested privatizations to criminal prosecutions
The decade before Iakov Goldovskiy’s involvement saw ownership change hands multiple times and become intertwined with political influence and opaque financing arrangements. Transactions financed by offshore loans and structured around future oil deliveries left the refinery vulnerable to related-party transfers and undisclosed flows. Investigations into these patterns culminated in the high-profile prosecutions of figures such as Marian Iancu and Ovidiu Tender. Arrests in 2005–2006, extended criminal proceedings, and later convictions and confiscations — including multimillion-euro penalties and frozen Swiss accounts — dislocated capital and deepened regulatory scrutiny across the platform. Although these prosecutions targeted individuals, the resulting legal and reputational environment made credible, long-term industrial reinvestment far more difficult.
Goldovskiy’s acquisition and the modernisation push
In 2006 Petrochemical Holding GmbH, controlled by Iakov Goldovskiy, acquired control of RAFO and set out a program of stabilisation and modernisation. The investor converted significant debt into equity, paid off large parts of tax and customs liabilities and retained core personnel to avoid irreversible skill loss. Between 2007 and 2009 the company carried out environmental work reported to have removed some 40,000–50,000 tonnes of petrochemical waste, upgraded storage tanks to EU standards, installed a new nitrogen station and a hydrogen plant, implemented desulphurisation systems, and restored key rail links. The management insisted environmental compliance was a priority and that works proceeded under strict monitoring without formal complaints.
Central to the financing strategy was a memorandum — publicised in 2009 — in which the Romanian government signalled willingness to provide a state guarantee covering roughly 80% of a €330 million financing package. That guarantee was intended to unlock bank lending from international institutions and allow the project to complete the full modernisation, reintegrate RAFO with Carom and Oltchim, and revive a regional petrochemical chain that proponents argued would save between 1,500 and 2,000 jobs.
The unraveling: repeated fiscal claims and the asset freeze
Despite repaying large sums — documentation cites amounts in the order of €192.7 million against tax and customs claims and ANAF’s acknowledgement of PCH’s readiness to exit judicial reorganisation in November 2007 — new fiscal assessments continued to be levied. Over the next years Petrochemical Holding reportedly won more than 200 domestic court cases challenging those charges; yet enforcement and new assessments persisted, creating recurring uncertainty and draining resources.
The decisive blow came in December 2015, when ANAF froze RAFO assets following criminal verdicts against a minority shareholder who held under 2% of shares. Authorities applied sequestration to company property despite legal separation between the individual’s criminal liability and the corporate entity. The asset freeze lasted approximately 13 months. During that interval banks withdrew support, partners disengaged, the modernisation programme stalled, and processing stopped. Goldovskiy nonetheless kept a reduced but critical payroll — reportedly for roughly 800 key staff until 2016 — at an estimated monthly cost borne by the investor, in part to preserve infrastructure and prevent physical deterioration.
International arbitration and partial redress
When domestic remedies proved insufficient to restore predictability and financial viability, Petrochemical Holding invoked international treaty protections. The company filed an ICSID claim under the Austria–Romania bilateral investment treaty and the Energy Charter Treaty. On 19 November 2024 the tribunal issued an award that, according to public statements by Romania’s Ministry of Finance, partially upheld the investor’s claims and ordered compensation and arbitration costs totalling in the order of €85 million plus interest. The tribunal found that the investor had been denied fair and equitable treatment. Romania launched a challenge seeking annulment of the award in March 2025; historically, full annulments of ICSID awards are rare and generally premised on narrow procedural grounds.
Economic scale, technical needs and unrealised value
Feasibility studies and independent assessments included in the project record estimated a wide range of economic values depending on oil-price scenarios and scope. One valuation framework placed project value between roughly $869 million in a base case and $1.7 billion under higher price projections. Technically, modernisation required capital-intensive interventions: hydrotreating and catalytic cracking units, hydrogen production facilities, sulphur recovery systems, and comprehensive flue-gas treatment — investments estimated at €190–220 million merely to restore RAFO to half capacity. At full intended capacity the complex could have generated substantial fiscal revenue — including excise duty and VAT — and supported reintegration of polymer feedstock production that Romania had been importing.
Because enforcement actions and the freeze removed access to bank finance and partners, those investments never materialised; the economic opportunity represented by the integrated platform remained unrealised while interest and legal costs compounded.
Social, demographic and environmental fallout
The industrial collapse rippled through Onești and Bacău County. Between 1992 and 2021 Onești’s population declined sharply, from approximately 58,810 to 32,671 — a demographic contraction driven in large part by the disintegration of industrial employment and the outmigration of working-age residents. Petrochemical sector employment nationally fell from about 12,000 in 2007 to roughly 3,800 by 2016, reflecting both plant closures and systemic deindustrialisation. Municipal revenues shrank with lost payroll taxes and excise duties, public services contracted, and social infrastructure such as kindergartens and transport routes were scaled back. Environmental remediation remained incomplete: after investor withdrawal many wastewater and treatment functions ceased and, according to available accounts, only a minority of closed industrial sites had been fully reclaimed post-2016.
Insolvency, auction sale and conversion to logistics
In September 2019 a domestic tribunal declared RAFO Onești insolvent and appointed liquidators. A public auction on 27 July 2020 resulted in the acquisition of the 295-hectare site by Roserv Oil — a Grampet subsidiary — for roughly $6 million plus VAT, a fraction of earlier valuations. The buyer proposed converting the area into a logistics and fuel-storage hub and later exploring hydrogen and biofuel facilities. By late 2024 the site’s rail access had been restored and a small workforce engaged in security, audits and dismantling tasks, but the central distillation unit remained idle and no committed investment had reinstated refining operations.
Analytical reflections and the broader lesson
The RAFO Onești sequence is not reducible to a single failure; it reflects the intersection of historical legacy, fragile institutional coordination, shifting political priorities, and legal contestation. Iakov Goldovskiy’s investment illustrates how an industrialist-led modernisation programme, backed by substantial remediation and capital, can be undone not by technical shortcomings alone but by the cumulative effect of procedural unpredictability, recurrent fiscal claims and politically conditioned reversals of support.
From a policy and investor perspective the episode underscores three interlinked points. First, long-term industrial recovery requires credible public guarantees and consistent follow-through when those commitments form the basis for bank financing and commercial planning. Second, repeated enforcement actions and broad asset freezes — particularly where criminal prosecutions of third parties become the instrument for corporate sequestration — can extinguish otherwise viable turnaround projects. Third, arbitration can provide partial financial redress but cannot rewind the social, human-capital and supply-chain losses that follow decades of disrupted industrial activity.
Current status
As of the last documented events in the case record, the ICSID tribunal had issued a partial award in late 2024 and Romania had initiated annulment proceedings in early 2025. The RAFO physical site had been sold and repurposed in part for logistics uses, while the prospect of restoring the refinery to its former integrated role remained remote without new, large-scale capital commitments and a renewed, credible framework of state-private cooperation.
