The voice of the entire
Upstream sector in Romania

Effective taxation in Romania increased to 17.4%, while the average in European states decreased to 8.8%

imagineBucharest, Romania: The Romanian Petroleum Exploration and Production Companies Association(ROPEPCA) bring in the attention of the public opinion the results of a study analyzing the development of effective taxation applied to oil and gas industry in Romania.

The study made by Deloitte Romania reveals the fact that the average taxation of the industry- royalties level and similar taxes (supplementary tax on income as a result of liberalization of the natural gas prices, special construction tax, tax on crude) has increased in the period 2014-2016 from 15% to 17.5%. Starting with 2017, due to the elimination of the special construction tax, the average effective taxation decreased to 13.9% in Romania. The trend is contradictory to that of many European states where the effective average rate decreased as a response to the decrease of the oil and natural gas prices that affects the industry in the past years.

“This study contributes to correct information and clarification on the royalties regime at a European level in a time when false, incorrect information is circulated in the public space, contravening with regards to the development of major investment projects in the oil and gas industry that benefit the Romanian economy”, stated Harald Kraft, ROPEPCA President.

Deloitte analysis was performed on data from public sources and shows that the average effective rate of royalties and similar taxes decreased in 2016 compared with 2015 in 9 European countries: UK, Norway, Denmark, Hungary, Ireland, German, Spain, Italy and Albania.

Another conclusion of this study is that the effective tax rate determined gas upstream activity in Romania has a much higher value than that of that of oil production, the difference mainly resulting from the supplementary tax applicable to natural gas.

Currently, in Romania there are over 400 oil fields and more than 13,000 active wells. To maintain a constant level of oil and gas production it requires significant investment and a stable fiscal framework, predictable and friendly.

 

ROPEPCA: Ever since its incorporation in 2012, the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) aimes to promote the onshore O&G industry, supporting the development, the diversifying and the competitiveness in the industry. ROPEPCA gathers 16 of the most active companies in the onshore industry: ADX Energy, Amromco, Expert Petroleum, Fora Oil & Gas, Hunt Oil, Mazarine Energy, NIS Petrol, Oilfield Exploration Business Solutions, OMV Petrom, Panfora Oil and Gas (MOL Group), Repsol, Sand Hill, Stratum Energy, Serinius Energy, Vermilion Energy, Zeta Petroleum.

Currently ROPEPCA’s members hold a vast majority of the onshore concession blocks in Romania, which in 2016 represented a cumulative investment of 650 million EUR, a turnover of almost 2,9 billion EUR, a tax contribution of 300 million EUR to the state budget and created and maintained 14,800 jobs.

 

Download the study in PDF format.

 

Contact:

Daniel Apostol, Secretary-General

Tel: +40 372 160 137; Mobile: +40 732 999 353 Email: daniel.apostol@ropepca.ro

Anca Budu, Administrator Executiv

Tel: + 40.21.230.08.81; Mobile: +40 747 617 657; Email: anca.budu@ropepca.ro

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