Parliament in Bucharest passes the Offshore Law

The offshore law was adopted by the Chamber of Deputies, the decision-making chamber, by 249 votes “for” to 34 votes against. The law goes to promulgation by President Klaus Iohannis.

According to the draft adopted by the deputies, the Government will be able to impose temporary restrictions both on price and on sale for the domestic production of natural gas in the Black Sea, the only change compared to the variant adopted by the Senate.

“The Romanian state will collect 60% of taxes and duties for the gas from the Black Sea. Romania will become an important regional player “, said the Speaker of the Chamber of Deputies, Marcel Ciolacu, after the vote in the Parliament. “We will become energy independent,” Energy Minister Virgil Popescu underlined.

The law stipulates that producers will pay additional tax when the price of gas will exceed 85 lei / MWh, compared to 45.71 lei / MWh, as established by the law in 2018. The tax increases progressively depending on the price of gas.

According to the law adopted by the Parliament, investors can deduct a maximum of 40% of the total tax on additional income, for investments made in the upstream segment, compared to 30% at present. It also removes the obligation to sell 50% of domestic production, with the government only being able to intervene in crisis situations.

The law also establishes that Romania will have the right of preemption for the purchase of natural gas, ie it will be able to cover the domestic needs before selling the surplus for export. The new law also stipulates that the royalty regime and the specific tax regime will not change, in any form, for or against investors, for the duration of the agreements.

The first gas deliveries under the offshore law would start in the second half of this year. Also, the law establishes the same fiscal framework for offshore and deep onshore investments, which will lead to the acceleration of onshore investments in Caragele, Buzău County, the largest gas field discovered in the last 30 years in Romania.

black seachamber of deputiesdutiesenergygasoffshoreoffshore lawparliamenttaxes
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