After several years of delays, the new Offshore Law has finally passed Parliament and was approved by the Chamber of Deputies on Wednesday. Although investors are not very pleased when it comes to taxation, they welcome the final vote today in plenary and await the final form after promulgation.
“We are delighted that another very important stage has passed and we look forward to seeing it in the Official Gazette, because there are still things that can happen until then, so that after it is clearly written, beaten in stone, investors will do their calculations and take the FID (final investment decision), where it is needed,” Cătălin Niță, executive director of the Petroleum and Gas Employers’ Federation (FPPG), told Energynomics.
Although investors are not very satisfied with the level of taxation established by the new law, they are ready to accept the changes proposed by the Romanian state.
“We would have liked a more competitive level of taxation, but we hope that the law will lead to investments,” he said.
One of the amendments to the law allows the Romanian state to have the preemption right over the gas sold, in order to cover the state reserves.
“It is one of the failsafe mechanisms of the state, so as to get rid of stress in various situations. The state explained it to us, in principle, we understood it. The form may have been better defined, but we’ll see how it goes after promulgation. Personally, I am curious if this article 20 can be implemented as it is written now and how (it can be implemented). In the Senate, ANRE came with a point of view, and in the Chamber of Deputies article 20 was more nuanced … The law will be good if it leads to FID (the final investment decision),” he added.
Unlike Black Sea Oil & Gas, which is in an advanced stage with its own investment project, OMV Petrom has not yet officially made the final decision on the investment in Neptun Deep. Both companies have raised objections to taxation. Contacted by Energynomics, BSOG officials declined to comment.
Previously, they showed dissatisfaction with the taxation regime.
“The evaluation of the draft of the new offshore law shows us that it does not eliminate the tax on additional income that blocked offshore projects in the Romanian continental shelf of the Black Sea in the last four years. BSOG developed the MGD project on the premise that these offshore tax measures will be repealed by the time production begins. We have repeatedly stated that the extremely burdensome additional taxation is contrary to the assurances and legal provisions offered by the Romanian State when investors entered the country, it is very onerous and makes Romania uncompetitive compared to other offshore jurisdictions,” BSOG officials previously said.
“While Romania continues to explore opportunities and wants to impose higher taxes on offshore projects, Turkey has proactively decided to reduce taxation (exemptions from customs duties, VAT and other taxes) and will be prepared to put gas discovered off the Black Sea belonging to Turkey since 2023 into production,” they added.
BSOG could start extracting gas from the Black Sea in the second half of this year, and work is progressing, BSOG officials also said.
In the other important project, OMV and Romgaz would release the first gas molecule from the Black Sea in 2026, needing capital to support investments worth several billion euro.
