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Offshore bill – adopted by Senate with amendments, may be challenged to CCR

The Senate plenary has adopted on Monday the offshore draft bill with the amendments proposed on the same day by the PSD and ALDE representatives in the parliamentary committees.

The draft law was adopted with 81 votes for, 9 against and 15 abstentions. The draft will further on reach the Chamber of Deputies, the decisional chamber.

One of the most important amendments reads that the current royalties are to be applied for the petroleum output in the Black Sea. Another amendment reads that, during the entire period of oil agreements, decades ahead, the royalties’ regime and the tax regime will not be changed. Investments made before and after the bill comes into force will be deducted.

The reporting commissions – on economy and energy – have determined that the investor can deduct a maximum of 60% of the additional income from the investment made.

The bill sets out some measures necessary for the implementation of petroleum exploration, development, exploitation and abandonment oil exploration operations, as well as oil exploration of wells carried out by petroleum agreement holders on offshore oil perimeters, in accordance with the provisions of the oil agreements concluded between the holders and the National Agency for Mineral Resources (ANMR).

PMP Senator Traian Basescu argued that the bill is the result of ‘personal negotiations’ between PSD chairman, Liviu Dragnea, with the managers of investing companies. Basescu announced that the draft bill will be challenged by the opposition to the Constitutional Court.

The document was sent to parliament by President Klaus Iohannis for review.

The Presidency informed in a press release on August 2 that the exploitation of the oil and natural gas resources in the offshore areas in the Black Sea basin ‘has a particular importance for Romania, from the perspective of developing the internal market, of the beneficial contribution to the economy’s prosperity and of the Romanian citizens, but also in the light of enhancing the regional energy security.’

“In this regard, an efficient and sustainable legislative framework is needed, to be able to ensure a fair distribution of the benefits between the state and the investors, which should contribute to the development of a long term partnership between the two sides, as well as to the enhancement of the confidence in the national economy’s perspectives”, the Presidential Administration said at the time.

The Presidency argued that for these reasons, the law must be re-examined by the lawmakers “in the view of stability and long term predictability of the legal framework enforceable to this sector and to avoid potential negative effects.”

The Presidency also considered that the law should comprise clear provisions to enable state-investors partnership and so that the Romanian economy should benefit from the natural resources’ exploitation in the Black Sea area over long term.

US Energy Secretary, Rick Perry, requested the Romanian Ambassador in Washington D.C., George Maior, that the Romanian authorities assure the concordance between the offshore bill and the annex which includes the calculations for expenditure deduction.

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