OMV Petrom Welcomes 'Much-needed' Changes to Romania's Offshore Gas Law

Credit: OMV Petrom (File photo)
Credit: OMV Petrom (File photo)

Romania's OMV Petrom on Wednesday welcomed changes to an offshore gas tax law filed by the government in Bucharest last week as a "much-needed" step for the development of Black Sea gas.

Gas producers have spent 15 years and billions of dollars preparing to tap Romania's estimated 200 billion cubic metres of gas in the Black Sea, only to delay or put their projects on hold four years ago when an additional tax was introduced.

If the changes to the offshore bill are approved in parliament the current tax will be lowered.

The changes to the legislation include a smaller progressive tax tied to gas sale prices. The new tax bill also states that the tax regime will not change for the duration of the projects, providing a guarantee of stability needed for investors.

The bill also removes export restrictions for the gas, except in emergency situations.  

"The publication of a draft offshore law is a long-awaited and a much-needed step to ensure the necessary conditions for the development of the Black Sea gas," OMV Petrom told Reuters.

"It is important for the law to provide a strong stability clause, ensure a free market and provide for a competitive fiscal and regulatory framework," it added.

OMV Petrom, majority-controlled by Austria's OMV discovered 1.5-3 trillion cubic feet of gas in the Black Sea it had planned to extract jointly with Exxon Mobil until the company's exit. Romgaz is acquiring Exxon's stake.

Petrom is expected to make a final investment decision next year.

Romania's oil and gas employers' association also welcomed the bill on Wednesday, saying it was assessing the impact of the proposed amendments.

"Unlocking these legislative changes is indispensable not only for Romania's energy security, but also for the regional one, especially in the new context of sanctions against Russia," it said in a statement.

(Reuters - Reporting by Alexandra Schwarz-Goerlich; additional reporting by Luiza Ilie;Writing by Miranda Murray; Editing by Jane Merriman)

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