Bogdan Tudorache

The royalty stability for offshore exploitation was removed during the game. “The stability clause introduced in 1999 by OG 160 was repealed in 2018 … they changed the rule during the game. It is unlikely that the harm done by Law 256/2018 could be easily rectified,” says Gabriel Biriș, managing partner Biriş Goran SPARL.

The lack of stability joins the taxation of the price on the Austrian stock exchange from Baumgarten, Central European Gas Hub (CEGH), a price that has nothing in common with the local market, now being lower than the domestic one, although at the beginning of the law, it was much larger. And the tax rate in Romania is well above the Union average.

“Romania has the highest level of specific taxation in Europe – three times the average. We also have a non-representative benchmark price, but the law provides that the highest price between CEGH and the local one is taken into account,”says Biriș, explaining that people in the government have argued for a 90% increase in the government’s share of the profit by the fact that “multinationals are draining Romania.”

Thus, the sector was up in arms in 2018 with an increase of 41% of the taxation, while the incomes of 2018 increased only by 8%. Even after the changes to the offshore law, the government’s share remains high, at 60% (it is about dividing the gross profit before tax in the upstream sector of natural gas through the future changes currently proposed), Biriș explained.