Romanian Off Shore Law to Be Promulgated

The Romanian Chamber of Deputies approved the famous offshore law as the ruling chamber, with 249 votes in favour and 34 votes against. President Klaus Iohannis will promulgate the law shortly.

According to the latest version of the law, the Romanian Government will be able to impose temporary price and sale restrictions on domestic natural gas production in the Black Sea.

The Romanian state will collect 60% of taxes and duties for the gas from the Black Sea. Romania will become an important regional player.

Marcel Ciolacu, speaker of the Chameber of Deputies

Under the previous law, producers must pay an additional tax if the gas price exceeds EUR 17/MWh, up from EUR 9/MWh. The tax rises following the price of gasoline.

According to the law passed by the Parliament, investors can deduct up to 40% of the total tax on additional income for investments made in the upstream segment, up from 30% currently. It also eliminates the requirement for the Government to sell 50% of domestic production, with the Government only able to intervene in crises.

The law also establishes Romania’s right of preemption in the purchase of natural gas, implying that it will be able to meet domestic needs before selling the surplus for export. The new law also states that the royalty and tax regimes will not change in any way, for or against investors, for the duration of the agreements.

According to the Romanian PM, the first offshore gas deliveries will begin in the second half of this year. The officials hope for this strategic move to help the country get rid of the need for Russian gas and become a regional supplier. Romania imports up to 10% of gas from abroad.