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Upstream sector in Romania

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Disclaimer: The information presented in this section represents the opinion of the writers of the articles and ROPEPCA neither  assumes nor endorses the position presented in the documents, unless stated otherwise.ROPEPCA’s official position is usually expressed via position papers published on our website and marked as such.Although we continuously look to present the information correctly, accurately and up to date we take no responsibility on the information provided under this section. The information contained in this section is for general information only and no business decision should be taken based on the information presented.ROPEPCA is not liable for any loss or damage that might be caused to you or your company in connection with the use of the information extracted from this section.

Offshore and onshore uncertainties

The Chamber of Deputies has recently adopted several important changes to the way offshore oil operations are being dealt with. A progressively complex tax system has been introduced for the additional revenue of operators for the sale of natural gas. The obligation for operators to conclude contracts on the centralized markets for at least 50% of the quantity of natural gas contracted during the calendar year was also promoted. The changes were brought in a one-day extraordinary...

Oil is the brother of agriculture

It's not a metaphor. It is the beginning of a light explanation, for openminded people who see, but do not quite understand. There is no disagreement between investors in agriculture and in petroleum industry either in Dudeşti, Şandra or elsewhere in Banat or the world. Do you know why? Because, here, in our country, in Banat, the Western Plain is a diamond for Romania and Europe. It's full of oil and gas. At our neighbors in Hungary, tourist resorts are based on thermal waters. Where...

ROPEPCA: The best solution for domestic gas, the Government to motivate the industry to invest in processing

The best solution for domestic gas would be for the Government to motivate the industry to invest in their processing, Harald Kraft, president of the Romanian Petroleum Exploration and Production Companies  Association (ROPEPCA), said at a conference on Tuesday. "The Offshore :aw was voted, but I do not want to interfere in the business of my offshore colleagues. I think an important step was that the famous Emergency Ordinance 64 has finally become a law, but producers are not...

Report: The Perspective of Natural Gas in Romania and the modalities for their superior capitalization

Energy Policy Group (EPG) members , Vasile Iuga and Radu Dudău, conducted the study The Perspective of Natural Gas in Romania and the modalities for their superior capitalization. The report analyzes the current natural gas sector from the point of view of reserves, infrastructure and market setup. The report also addresses the prospects for the evolution of different segments of natural gas consumption by 2030 and provides appropriate policy and regulation recommendations which...

Senate has reduced the mandatory rate for wholesale sales on the gas exchange to 50% from 70% and dropped the OPCOM monopoly

The Senate has amended the Electricity and Natural Gas Law by establishing a mandatory annual percentage for wholesale gas sales on the profile centralized markets of 50%, compared to 70% proposed by the Chamber of Deputies. Moreover, the Senators gave up the idea of the Committee for Industries of the Chamber of Deputies to give OPCOM, company controlled by Transelectrica, the status of single operator of the centralized gas markets, in conditions in which, currently, all gas transactions...

The portfolio predicament - Deloitte Article

How can oil and gas companies build a fit-for-the-future portfolio?   Read the full Deloitte report here . 

How much does the state collect from petroleum companies

Royalties collected by the Romanian state for the exploitation of hydrocarbon resources (oil and gas) last year climbed to RON 1.06bn, by 30% higher than the level recorded in the previous year, according to information provided by the National Agency for Mineral Resources. The increase comes especially from the gas sector, where the amount of royalties paid increased by 50%, from RON 579mln to RON 798mln. In terms of oil, the amounts paid remained relatively constant, RON 260mln in 2017...

The consumer loses, the state wins. Why did NAMR establish the reference price for domestic gas depending on quotations in Austria and it excluded the Romanian exchanges

The new management of the National Agency for Mineral Resources last month established as reference price for the calculation of royalties for natural gas from domestic production the average quotations of natural gas at the Baumgarten hub on the Day Ahead Market. The High Court of Cassation and Justice required NAMR to find a solution to update the reference price of gas at which royalties charged by the state are calculated. The Authority had four options available, but chose the most...

Chaos in regulations. Taxation of petroleum companies, the "hot potato" passed between institutions

Although we are one of the largest oil and gas producers, no state institution can specify what it the effective rate of taxation of this sector, taking into account royalties and the other taxes applied in the field. Moreover, even the figures regarding revenues obtained from royalties vary from one institution to another. The authorities have been talking for several years about a new royalty system for oil and gas producers, but the problem hasn't been solved yet. The subject is even...

Romania, unique in Europe: The only country with a significant gas production that imposes the obligation of trading on the exchange

In Europe, the existence of natural gas trading obligations on centralized markets or other forms of open auctions (or Gas Release Programs) represents an exception rather than a general rule. Currently there are three countries with such trading obligations: Romania, Greece and Poland, according to an analysis by Deloitte. Greece does not produce gas and Poland is dependent on imports. In Greece and Poland, the obligations are implemented in order to protect against a dominant position...

Deloitte: The 30% quota currently established for the Romanian producers is sufficient for triggering the natural gas market development

In Europe, the existence of natural gas trading obligations on centralized markets or other forms of open auctions represents an exception rather than a general rule and the 30% quota currently established for the Romanian producers is sufficient for triggering the natural gas market development, according to an analysis conducted by the consulting firm Deloitte, regarding obligations related to centralized trade of natural gas in Europe. "In Europe, the existence of natural gas trading...

Deloitte study: In Romania, the effective average rate of royalties and other similar taxes fell to 13.9%

The effective average rate of royalties and similar taxes decreased in Romania to 13.9% in 2017, from 17.4% in 2016, 16.9% in 2015 and 15% in 2014, according to Deloitte study "An overview on royalties and similar taxes". Deloitte mentions that, in Romania, the effective tax rate is calculated as average of royalties and other similar taxes, i.e.: the tax of 60% on windfall gains resulting from gas price deregulation, the tax on special constructions, the tax of 0.5% on revenues...

Petroleum companies in Romania pay much higher specific taxes than the European average (ROPEPCA)

Petroleum companies in Romania pay much higher specific taxes than the European average, although there are voices in the public space according to which the state gains nothing from this sector, Dan Apostol, Secretary General of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Tuesday during a press conference. ROPEPCA and Deloitte on Tuesday presented a study according to which the effective average rate of royalties and other similar taxes...

Romanian gas producers: We are taxed at non-realized revenues. The average price at BRM is RON 76-77/MWh, while the reference price for royalties - RON 110-115/MWh

Romanian gas producers are currently taxed for revenues they do not realize, after the National Agency for Mineral Resources (NAMR) imposed the calculation of royalties owed by producers to the state at a reference price calculated depending on the average quotation of gas at the Austrian gas hub Baumgarten, significantly higher than on the Romanian market, Harald Kraft, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), has stated. "The...

ROPEPCA: Different taxation for the onshore and offshore petroleum sectors would mean discrimination in the market

Eliminating the supplementary charge in the offshore petroleum sector would create discrimination in the market for onshore oil and gas producers, Harald Kraft, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Tuesday during a press conference. "It's not fair, as gas goes on the same market. Potatoes in Dobrogea are not taxed higher than potatoes in Moldavia, as they are produced in Romania. Both onshore and offshore gas are...

Progress continues on BRUA despite concerns

The 4.4 bcm/y Bulgaria-Romania-Hungary-Austria gas pipeline is making progress, but doubts are mounting over its economic rationale  Hungary has started work on its section of the Bulgaria-Romania-Hungary-Austria (BRUA) gas pipeline, while Romania is poised to start laying pipes in the coming weeks. However, a number of obstacles could still derail the project.   BRUA will deliver gas to Europe from Romanian deposits in the Black Sea. The first phase is designed to...

Why producers in the Black Sea want the connection of more homes to the gas network. Harald Kraft, ROPEPCA: "It is all about increasing consumption"

Romania can become in the following years one of the most important gas producers in the European Union. Besides the technical infrastructure projects and the laws in debate in the Parliament and which will influence the gas market, government officials must also prepare a coherent strategy for our country to fully benefit from the advantages of the investment made by OMV-Petrom and Exxon in the Black Sea. The latest evolutions in this regard have given birth to many questions and...

Perspective: Petroleum companies could lose their concessions if at the end of the year they have outstanding debts related to taxes, duties or other budgetary payments

The National Agency for Mineral Resources (NAMR) will be able to terminate the petroleum concession agreement if the title holder of such an agreement registers at the end of the year outstanding debts related to taxes, duties or other budgetary debts, according to a draft legislation. The measure is necessary to prevent "unfair tax behavior towards the Romanian state" the authors of the draft legislation show. It was initiated by the parliamentarians of the ruling coalition and UDMR....

Hearings in Senate's Economic Committee: NAMR and the Ministry of Economy to resume today the discussions on the law on royalties

• Daniel Zamfir: "We are at the lowest level in Europe in terms of royalties' share in GDP" • Dorin Ursarescu, NAMR: "We shouldn't compare the states in terms of royalties, but in terms of the entire tax system" • Ursarescu, NAMR: "There is something rotten, not necessarily with the level of royalties, but how they are collected" The National Agency for Mineral Resources (NAMR) and the Ministry of Economy will resume today discussions on the draft law on royalties,...

Competition Council: Exempting offshore petroleum operations from the supplementary charge - potentially a state aid

Although some draft laws require years to be approved by the Parliament, our politicians managed to mobilize for the draft law on the exemption of offshore petroleum operations from the supplementary charge and refund, in the form of tax credit, of the amounts collected so far, document which is already with the Chamber of Deputies, after it was initiated by Tudose Government, in late October 2017, and was quickly passed by the Senate. In the explanatory statement on exemption from the...

ANRE has prepared the draft order creating the premises for the emergence of two spot gas markets, one managed by BRM, and the other by OPCOM

The Romanian Commodities Exchange will remain, at least for the next period, the administrator of a platform on which natural gas will be traded, despite the intention of the Chamber of Deputies' Committee for Industries to grant the monopoly on the management of the gas market to OPCOM. This is provided by a draft order of the National Regulatory Authority for Energy (ANRE), which sets the General Rules on the centralized gas market and establishes the conditions for the set-up of a spot...

Decision: making permanent the supplementary charge applied to Romanian gas producers is constitutional. How much did the state collect from this source

The Constitutional Court of Romania (CCR) has rejected the complaint filed by 56 PNL deputies under which they claimed that making permanent the supplementary charge of 60% or 85%, depending on the price, applied to domestic gas producers, following the deregulation of selling prices to suppliers, violates the fundamental law of the country. CCR rejected the complaint, the Court decision currently being in the drafting phase. The Liberal parliamentarians had challenged at the Court, in...

Senators voted that offshore petroleum operations be exempt from the supplementary charge

• The Chamber of Deputies is the decision-making body. • The draft provides that the amounts charged so far will be refunded as tax credit Senate adopted on Monday the draft law 408/2017 on certain measures necessary for the implementation of petroleum operations by title holders of petroleum agreements regarding offshore petroleum blocks, maintaining the article regarding a tax exemption for offshore petroleum operations, the amounts charged so far from operators following...

The new reference price for natural gas extracted in Romania, in force

• NAMR has prepared a new calculation formula, depending on prices in Austria NAMR Order approving the Methodology for determining the reference price for natural gas extracted in Romania was published yesterday in the Official Journal and came into force. Thus, the mineral resources for natural gas extracted in Romania will be calculated, in view of determining royalties, depending on trading prices on the CEGH Vienna hub, according to an announcement issued on Friday by the...

"Our exchanges become decorative elements if Romanian gas is sold at the price set in Vienna"

Instead of developing the domestic gas market, including the two exchanges where producers are required to sell anyway 30% of the amounts extracted, the National Agency for Mineral Resources (NAMR) announced on Facebook that Vienna becomes the reference for the calculation of royalties. "The Romanian exchanges become decorative elements", specialists in the field say. At the end of last week, NAMR announced through its Facebook page that the new reference price for natural gas, price...

INTERVIEW Harald Kraft, ROPEPCA, about the new modality of calculation of gas royalties: The signal sent to potential foreign investors, disastrous

The new modality of calculation of royalties for Romanian gas, reported to gas prices in Austria, sends a disastrous signal to potential foreign investors, and reporting the Romanian regulatory framework to a foreign market means only losing Romania's sovereignty in the gas market, Harald Kraft, ROPEPCA President, states in an interview with "Adevarul". His statements come in the context in which on Friday the National Agency for Mineral Resources (NAMR) issued the order amending the...

Romania has decided: an immature gas exchange, so we entitle the gas exchange in Vienna to determine how much Romanian gas should cost

How we are building a fire under ourselves: Romania, the third country in the EU in terms of gas production, has decided that in the future it would relate its gas prices to prices on the exchange of a country that has zero production: Austria. Moreover, a high Romanian official said that "the Romanian gas exchange is completely immature". It does not surprise us, because even the President of the Committee for Industries of the Chamber of Deputies, Mr. Iulian Iancu, has repeatedly...

NAMR has issued the order under which the reference price of gas will be calculated depending on Vienna exchange

The National Agency for Mineral Resources (NAMR) on Friday issued the order under which the reference price for natural gas extracted in Romania, depending on which royalties owed to the state budget by producers will be calculated, will take into account quotations on the CEGH Vienna exchange, according to a communique of the institution. The order was sent for publication the Official Journal and will enter into force as of the date of its publication. Thus, the reference price for...

ROPEPCA criticizes NAMR’s Order on the Methodology for determining the reference price for natural gas extracted in Romania

ROPEPCA considers that the National Agency for Mineral Resources decided to issue this Order without taking into account the positions expressed by the main domestic natural gas producers during the public consultation held on February 7, 2018, but basing this order exclusively on the conclusions of a study signed by a university professor belonging to the Oil and Gas University of Ploiesti. The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) requests the...

Failing to update the reference gas price - State has lost RON 7bn, but no culprits are found

• Dorinel Ursarescu, ANRM: "The gas exchange in Romania - entirely immature" • Alexandru Maximescu, OMV Petrom: "We believe it's fair for producers to continue to pay royalties at the price realized and received by them" • Gabriela Calburean, Romgaz: "We support linking the reference price to the producer's selling price" • Harald Kraft, ROPEPCA: "A fair approach would be to pay royalties at the market price realized by the producer in Romania, not abroad"...

ROPEPCA: Reporting the reference price to the Austrian gas HUB is irrelevant for producers and could have an inflationary impact to be borne by consumers

Setting the reference price for natural gas based on a market calculation relevant for Romania, reflecting the price actually realized on the Romanian market, is very important for the end-consumer, but reporting the reference price to the Austrian gas HUB is irrelevant for Romanian gas producers, which don't have an actual connection to this hub, and taking over the price in Baumgarten as reference price for determining royalties for the domestic gas production may have an inflationary...

Calculation of gas royalties to change. Will there be price increases?

Romgaz and Petrom could be required to pay royalties by 75% higher if the NAMR order comes into force, order which eliminates the fixed reference price with a dynamic one, depending on the Vienna gas exchange. But what will the effects be? The Romanian state changes the modality in which royalty collected from gas producers with concessions on the territory of Romania is calculated. An order of the National Agency for Mineral Resources (NAMR) shows that the tax for gas exploitation will be...

NAMR proposes the determination of petroleum royalties depending on gas prices at the Austrian exchange

The National Agency for Mineral Resources (NAMR) has launched for public debate a draft order amending the methodology for determining the reference price of natural gas depending on which royalties owed to the state budget by producers will be calculated, price which takes into account the price of gas on the Austrian exchange. Thus, the reference price for gas extracted in Romania is determined monthly, depending on a formula including the average price of transactions performed in...

Viorel Stefan: The statute of the Sovereign Fund and the law on royalties to be discussed in Parliament

The statute of the Sovereign Fund for Development and Investments is currently in debate in Senate and the law on royalties will be debated in this parliamentary session, Deputy Prime Minister Viorel Stefan stated on Monday. "The statute of the Sovereign Fund is currently in Senate, I believe in May-June we can have an adopted law. Only then we will know its rules for operation and the portfolio", Viorel Stefan, who attended a conference organized by the Bucharest Stock Exchange on the...

Royalties for Romanian gas will be paid depending on the price in Austria. What does the petroleum industry say

A draft order of the National Agency for Mineral Resources (NAMR) changes the legislation regarding the taxation of natural gas produced in Romania. Royalties will no longer be calculated based on the price obtained by selling Romanian gas, but based on a formula that takes into account gas prices at the Austrian hub. The draft order of NAMR, published on 19 January, provides that royalties for gas extracted in Romania will be calculated and paid monthly based on a formula that takes into...

As soon as Gigi Dragomir was reinstated as President, NAMR launched a public consultation on the calculation of the reference price for natural gas

The National Agency for Mineral Resources (NAMR) launched, on 19 January, a public consultation on a draft order setting the calculation formula for the reference gas price, taken into account to calculate royalties. The measure was taken as soon as Gigi Dragomir was reinstated as NAMR President, by the interim Prime Minister Mihai Fifor, after he had been dismissed by Mihai Tudose at the end of last year. The order now in debate provides that the reference gas price will be...

Romanian gas producers will face significantly increased royalties, calculated at the average trading price on the main European gas exchange

The National Agency for Mineral Resources (NAMR) is considering changing the formula for calculating royalties owed to the state by Romanian gas producers, by changing the reference price of gas at which the percentage rates of royalty provided for in the Petroleum Law are applied, price not updated since 2008. If the change considered by the Agency is adopted and the domestic gas production maintains at levels comparable to the current ones, it would lead to a significant increase in the...

ROPEPCA President Harald Kraft reacts to the intention to increase the reference gas price: "Producers pay royalties at the market price"

• "The petroleum industry is used for attacks in the political world and this bothers us" • "We are heavily inspected by ANAF and the Competition Council" • "We don't necessarily need a reference price for the fair calculation of royalties", ROPEPCA President claims • Harald Kraft believes that "abuse is excluded" in the case of intra-group gas sales We don't necessarily need a reference price for the fair calculation of gas royalties, Harald Kraft,...

Ping-Pong with NAMR leadership: Fifor reinstates Gigi Dragomir, who had been dismissed by Tudose after only 2 months of investiture

Interim Prime Minister Mihai Fifor reinstated Gigi Dragomir as President of the National Agency for Mineral Resources (NAMR), who had been dismissed from office by the former Prime Minister Mihai Tudose, only two months after taking over the leadership of the institution. Gigi Dragomir, former inspector at the Ilfov County Public Finance Administration, had been appointed NAMR President in October, information from the public space indicating at the time that he did not have experience...

Change at the top of the institution managing mineral resources: Sorin Gal is interim head, replacing Gigi Dragomir, the former meat trader appointed three months ago

PM Mihai Tudose dismissed Gigi Dragomir as President of the National Agency for Mineral Resources (NAMR), according to a decision published in the Official Journal, and appointed Sorin Gal, former general manager of the institution during 2016-2017, as interim head. Gigi Dragomir had been appointed by Tudose on 3 October, although had no experience in the field. Dragomir was inspector within the Ilfov County Public Finance Administration and worked for a number of companies dealing with the...

The new royalties’ framework in the Romanian O&G Upstream

The Economy Ministry published in October the draft law for mineral, petroleum, and hydro-mineral resources. The document includes a much anticipated new royalties’ framework for the upstream O&G sector. Indeed, after three years of uncertainty caused by rumors and various attempts to change the royalties’ regime, and against the backdrop of politically hyped expectations that the government’s take from the extraction of oil and gas should raise, the draft law has...

The new president of NAMR, appointed in October, was revoked by Mihai Tudose

The President of the National Agency for Mineral Resources, Gigi Dragomir, appointed in this position in October, was dismissed, by decision of PM Mihai Tudose. The decision to dismiss Gigi Dragomir from the position of President, with rank of State Secretary, of the National Agency for Mineral Resources was published on Friday in the Official Journal. The leadership of the National Agency for Mineral Resources was taken over temporarily by the Deputy Secretary General of the Government,...

Government maintains the percentage rates imposed to producers of gas to be traded on the centralized markets

The Government maintains for next year the current mandatory gas quotas for transactions on the centralized markets valid for 2017, quotas of which the most important is 30% of domestic production. Thus, in 2018, producers will be required to trade on the centralized markets at least 30% of production and suppliers that do not have the capacity of producer to buy on the same markets at least 20% of the total contracted amount and resell to the wholesale customers at least 30% of the...

In terms of gas supply, ROPEPCA says "Romania is almost 90% independent from Russia"

Romania is almost 90% independent from Russia in terms of gas supply, the representatives of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) told us, adding: "In order to maintain this situation and in the best case scenario to reach energy independence, Romania needs a fiscal, legal and regulatory framework motivating investments in the upstream sector". ROPEPCA officials were kind enough to answer several questions regarding the developments in the energy...

Why we need a competitive energy market

For some time now, we have witnessed a long dispute within the political environment with regards to the opportunity of a liberalized and competitive energy market (electricity, natural gas) versus the necessity of maintaining a state control over this sector, which would give society more stability and security. Furthermore, this dispute is made worse – such as gas put on fire – by external factors exerting pressure, such as the infringement threat from the European Commission....

Parliament does not yield to the Presidency: Windfall gains from price deregulation for gas sold at a price higher than RON 85/MWh will be taxed with 80%

Windfall gains obtained following the deregulation of prices in the gas sector will no longer be taxed with 60%, but with two progressive rates, one of 60% for gas sold below a price of RON 85/MWh and one of 80% for income obtained from gas sold at a price higher than RON 85/MWh. The decision was made by the plenary of the Chamber of Deputies, the Decisional Chamber, which confirmed, with 195 votes in favor, 62 against and 14 abstentions, the Senate's decision to maintain its position...

After the draft had been published in October - the Ministry of Economy withdraws its proposal on royalties and announces an extensive study

• Gheorghe Simon: "The package of laws on royalties will be voted in Parliament in February next year" • Economy Minister: "We will set fair royalties for both the state and the business environment" • Daniel Catalin Zamfir, PNL: "I have learned that there are companies that have never paid any money as royalty to the Romanian state, although they have been exploiting for over 20 years" • Last year, the Court of Auditors announced that Romania lost USD 1.4bn,...

Government does not cancel the monopoly tax and other special taxes, keeping them for next year

The tax applied to energy companies for natural monopoly in the electricity and gas sector will be maintained by the Government until the end of next year, according to draft budget for next year, prepared at Government level and obtained by Profit.ro. Profit.ro had previously announced that the Government planned to keep taxation at least until 2020, according to the model designed at a certain point by Ponta Government, so as to collect approximately RON 150mln to the budget annually....

The new royalties’ framework in the Romanian O&G upstream

The Economy Ministry published in October the draft law for mineral, petroleum, and hydro-mineral resources. The document includes a much anticipated new royalties’ framework for the upstream O&G sector. Indeed, after three years of uncertainty caused by rumors and various attempts to change the royalties’ regime, and against the backdrop of politically hyped expectations that the government’s take from the extraction of oil and gas should raise, the draft law has...

Bad news for Romanian politicians' plans: A new European regulation prohibiting the unjustified restriction of gas flows on the EU's internal market enters into force today

While in Bucharest politicians are looking for solutions for the future Black Sea gas to be traded exclusively on the domestic market, a new European regulation aimed at improving the security of gas supply in the EU and prohibiting "the unjustified restriction of gas flows within the internal market" enters into force on Wednesday, November 1st. According to the text published four days ago by the European Commission in the Official Journal of the European Union, the Regulation is "binding...

The new Law on royalties, up for public debate: For the onshore oil and gas production, royalties will remain the same, but there are changes for the offshore production, introducing a fixed and a variable rate

The Ministry of Economy on Monday put up for public debate the Draft Law on the regulation of the royalty system for concessions of mineral, petroleum and hydro-mineral resources. Basically, for all these resources there will be only one legal framework on royalties, not separate as today. In terms of regulations on petroleum royalties, expected for at least three years, there aren't changes compared to the current provisions. In the case of onshore oil and gas production, the royalties...

The new petroleum royalties. Failure to pay for a period higher than 6 months results in the immediate termination of concession agreements

Government has completed the draft law on the new petroleum royalties, failure to pay them for a period of more than 6 months following to result in the immediate termination of concession agreements. The draft also introduces the possibility of updating the royalty rates by the competent authority, upon extension of the duration of the concession agreements, by applying the royalty rates in force at the date of signing the addenda. Title holders of concessions/licenses/permits in force on...

The draft Law on royalties, up for public debate

The Ministry of Economy today put up for public debate the Draft Law on the regulation of the royalty system for concessions of mineral, petroleum and hydro-mineral resources In the explanatory memorandum, the draft's authors show that they have taken into account "the need for simplification of legislation and restriction into a unitary legal framework, easy to update, built to ensure fair contributions of operators in the field of exploitation of mineral, petroleum and hydro-mineral...

OPCOM monopoly, blocked in the Parliament: The report under which the producers were required to trade at least 70% of gas production on OPCOM, sent back to the committee

The report for the adoption of GEO 64, under which the producers were required to trade at least 70% of gas production on OPCOM, which would have obtained the status of monopoly to the detriment of the Romanian Commodities Exchange, was sent back for the second time to the Chamber of Deputies to be reviewed by the Committee for Industries. The plenum of the Chamber of Deputies, the Decisional Chamber, should have voted on Tuesday the additional report of the Committee for Industries on the...

The European Commission does not agree with trading 70% of the quantities of gas on OPCOM only, threatening Romania with the infringement procedure

The amendments to OUG 64/2016 on the gas market, recently approved by the Chamber of Deputies' Industry Committee, could violate the fundamental freedoms laid down in the Treaty on the Functioning of the European Union and the principles of the free energy market, according to a letter received by HotNews.ro, from the European Commissioner for Energy and Climate Change Miguel Arias Canete, addressed to Liviu Dragnea, the President of the Chamber of Deputies, Toma Petcu, the Minister of...

The Committee led by PSD member Iulian Iancu has just sold us to the Russians

Deputies in the Committee for Industries and Services led by Iulian Iancu (PSD) yesterday sealed a trading monopoly in the gas market and pushed Romania to an infringement procedure, as the European competition legislation is not observed, endangering the EU funding for BRUA gas pipeline. Implicitly, the vote in the Committee has raised a big question as to the funding of Black Sea gas operations by ExxonMobil. In short: a new working day of the PSD in the interest of Romania. According...

The giant project of Exxon and Petrom in the Black Sea, threatened. The Parliament forces that 70% of the gas production be sold on OPCOM exchange

The Committee for Industries and Services of the Chamber of Deputies, led by the PSD Deputy Iulian Iancu, decided that 70% of the national gas production be traded in Romania on the market hosted by the Commercial Operator of the Electricity and Gas Market (OPCOM). The decision could be beneficial to Gazprom and could endanger the future of exploitation of the huge gas resources in the Black Sea. The Commission for Industries and Services of the Chamber of Deputies on Wednesday voted the...

GABRIEL PURICE, BRM: "We will challenge the law that gives exclusivity to OPCOM for gas trading"

• "It's the first nationalization taking place in Romania after 1990", BRM President believes The Romanian Commodities Exchange will challenge the amendments voted yesterday to the Electricity and Natural Gas Law, in the Committee for Industries of the Chamber of Deputies, which give exclusivity to OPCOM for gas trading and exclude BRM from the market. BRM President Gabriel Purice told us yesterday: "We will obviously challenge the abusive provisions of the amendments to Law...

Gas producers request parliamentarians, before the final vote, a fair decision on gas trading exclusively on OPCOM: there will be discriminations and major negative effects

The obligation to trade gas in a predetermined manner exclusively on OPCOM's platform is a commercially restrictive policy and introduces a discriminatory regime between the gas trading rules for domestic production and the rules applicable to gas imports, as foreign producers will be entitled to conclude bilateral contracts directly negotiated with the large consumers in Romania, while the domestic gas producers will not be allowed to conclude such contracts, Romanian Association of...

Decision: OPCOM - monopoly operator of the gas exchange for at least 70% of domestic production. ANRE head was denied access to hearing and kept at the door

OPCOM will hold the monopoly of operation of the centralized gas markets, and producers will be required to trade, as of 1 January 2018, the commodity on these markets, with an initial provision of 70% of production, percentage increased annually by the Government, "until the 100% quota is reached", the Committee for Industries and Services decided today, with 5 votes against, insufficient to block the decision. Profit.ro announced exclusively on Tuesday that members of the Committee for...

The Senate maintains the staged taxation of windfall gains in the gas sector, despite the contrary request of President Iohannis

The Senate rejected on Wednesday the request of President Klaus Iohannis to reexamine the ordinance under which the former Government led by Victor Ponta established a tax on windfall gains obtained as a result of price deregulation in the natural gas sector. The head of state had requested the Parliament to eliminate the additional threshold, established by deputies upon adoption of the ordinance, as well as the unlimited duration of the new tax. Government Ordinance no. 7/2013 established...

Mihai Tudose names a new head of the National Agency for Mineral Resources, one month after the previous appointment

PM Mihai Tudose appointed Gigi Dragomir as President with rank of state secretary of the National Agency for Mineral Resources, thus replacing Iulian Offenberg, who had been appointed President of NAMR on 30 August. The decisions on Offenberg's dismissal and Dragomir's appointment were published on Tuesday evening in the Official Journal. At the same time, Tudose appointed Offenberg Undersecretary of State and Vice-President of the Competent Regulatory Authority for the Black Sea...

ROPEPCA: Market conditions for Romania's oil companies remain difficult, taxation has increased

The market conditions and the regulatory framework in which the oil companies carry out their activity in Romania remain difficult, in conditions in which the effective taxation applied to the oil and gas industry in Romania has increased with each year, the level of royalties and other similar taxes (the tax on windfall gains obtained as a result of price deregulation in the gas sector, the tax on special constructions, the tax applied to revenues from crude oil exploitation) increasing...

Tudose revoked NAMR head, installed by Grindeanu, appointing instead a former adviser to Gerea

PM Mihai Tudose changed the leadership of the National Agency for Mineral Resources (NAMR), installing at the head of the institution Iulian Offenberg, adviser to Andrei Gerea during the time when he was Energy Minister in Ponta Government, and former department head at Conversmin. Offenberg was also adviser to Senator Haralambie Vochitoiu. NAMR was led since January by Aurel Gheorghe, appointed at the time by former Prime Minister Sorin Grindeanu.   Sources:  profit.ro...

Government plans to prohibit the increase in royalties for petroleum companies with offshore concessions in the Black Sea

Petroleum companies with offshore oil and gas concessions in Romania, in the Black Sea, in progress, will have the same regime of royalties valid on the date of signing the petroleum concession agreements, throughout their performance, according to a draft law prepared by the Government. Moreover, the draft contains a provision according to which the regime of royalties applied to offshore oil and gas concessions in the Black Sea, in force on the date of entry into force of the law, cannot...

energynomics.ro has released its 2017 Energy Strategy Summit report

The Romanian energy industry is in a new historical stage, where large developments take place, even in the absence of a single document such as a national energy strategy. More and more companies, including state-owned companies, adopt market-oriented policies and are forced to diversify their business in order to survive. These changes at the companies level require the adoption of changes in the primary and secondary legislation which would allow the legal framework to adapt to allow...

The lack of clarity and predictability of the regulatory environment in the gas field persists

The lack of clarity and predictability of the regulatory framework for natural gas persists, with negative impact on both the investment and production, and national energy security, said Artur Stratan, member of the Board of ROPEPCA – the Romanian Petroleum Exploration and Production Companies Association, at 2017 Energy Strategy Summit, held in Bucharest. Here it is the full transcript of Mr. Artur Stratan’s intervention at 2017 Energy Strategy Summit. Good afternoon, I...

Iohannis blocks the supplementary charge applied to Romanian gas producers and the permanence of the tax on liberalization

President Klaus Iohannis blocked, at least temporarily, the increase in tax rate on windfall gains obtained by domestic gas producers as a result of gas price deregulation, from 60% to 80%, and making this tax permanent, measures announced for the first time by Profit.ro and being prepared and, later, approved. "Given the specific reasons, of temporary and extraordinary nature, of introducing this tax, we believe that its regulation should follow the same temporary nature. Taking into...

Klaus Iohannis has returned to Parliament the law imposing a higher tax on oil companies' revenues, for prices above 85 lei / MWh for gas

President Klaus Iohannis on Friday submitted to Parliament, for review, the law for the approval of OG 7/2013 on the levying of tax on the additional income obtained as a result of the deregulation of natural gas prices. We recall that an amendment to the law provides for a higher tax for prices higher than 85 lei / MWh for gas sold by oil companies. Thus, for prices below 85 lei / MWh, the tax remains at 60%, as provided by GO 7/2013, and for prices above 85 lei / MWh, the tax will be 80%...

Liberalization of gas prices remains in force in the form adopted by the Government at least until autumn. Iancu report - returned to the commission

Gas producers will not be forced to sell their entire production on centralized markets managed under OPCOM monopoly, and the Romanian Commodities Exchange (BRM) will still be able to host natural gas transactions, at least until autumn. The Plenum of the Chamber of Deputies today decided to send back to the committees the bill for the adoption of OUG 64 on the liberalization of gas to producers. As the parliamentary holiday follows, between July and August, the draft will be resubmitted...

Fiscally advantaged, gas imports exploded

The supplementary charge applied to the domestic gas producers for profit obtained as a result of market liberalization creates great discontent in the market, especially since this year the supplementary charge has been increased from 60% to 80%. The future President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) claims that the domestic producers are thus disadvantaged as compared to the Russian gas giant Gazprom, which exports to the Romanian market...

Aristotel Jude defends the key provisions in the GEO 64/2016

The Committee for Industries and Services has finalized the Report on the DRAFT of Law on the approval of Government Emergency Ordinance no.64 / 2016, in another new step towards the amendment and completion of the Law on electricity and natural gas no.123 / 2012, in the Chamber, which is the decisional body. The measures proposed by The Committee for Industries and Services have sparked numerous critical comments, synthesized by  energynomics.ro  in  the most extensive...

ROPEPCA: The supplementary charge applied to Romanian gas producers is a huge discrimination, favoring Russia's Gazprom

The supplementary charge applied to Romanian gas producers for the profit obtained following market liberalization means a huge discrimination, favoring Russia's Gazprom, which is not required to pay these taxes or sell on the exchange the entire amount of gas, Harald Kraft, future President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Tuesday. "The supplementary charge was introduced in 2013 as a temporary measure for the period of...

With the attention on the political crisis, the report that forces gas producers to sell the entire production on OPCOM, with the status of monopoly, was quietly passed by the committee in the Parliament

The Committee for Industries and Services of the Chamber of Deputies, led by social-democrat Iulian Iancu, took advantage of the political chaos in the recent days and adopted the report on GEO 64, which targeted gas price liberalization for producers, with the amendments challenged by all the institutions consulted: European Commission, Government, Ministry of Energy, National Regulatory Authority for Energy, Competition Council etc. Changes have sparked criticism from all institutions....

Ambassador Mihnea Constantinescu: We have a big institutional problem with gas regulation, a parliamentary committee thinks it's more competent than the relevant ministries

Ambassador Mihnea Constantinescu, Ambassador at large, Special Representative for Energy Security at the Ministry for Foreign Affairs, says it's not OK for a parliamentary committee to consider itself more competent in regulating the natural gas sector than the relevant ministries and says it proves an institutional problem, the decision-making process in the field requiring changes and improvements. Constantinescu referred to the information reported by Profit.ro, according to which the...

The oil and gas industry is requesting a serious dialogue in the Parliament on gas price liberalization and supplementary charge: it's like we want the comfort of a Bentley, but at a price of a second-hand Dacia!

The oil and gas industry is requesting a serious dialogue at the level of presidents of the two Chambers of the Parliament on gas market liberalization and supplementary charge applied to the upstream sector, so that all implications on energy security are understood, Harald Kraft, Country Manager of Stratum Energy Group and President Elect of ROPEPCA, at the Energy Policy Group conference. "In Romania, it's like we want to have a comfort of a Bentley car, but we want to pay the price of...

Mark Wagley (ROPEPCA): Romania has a bright future if it will invest in the O&G sector

By stimulating capital investment in the O&G industry, Romania will both support the activity in sector, and simultaneously increase its state budget revenues, said Mark Wagley, ROPEPCA president, 2017 Energy Strategy Summit, in Bucharest, last week. “All the government has to do is to get out of the way and create a predictable and stable regime”, said ROPEPCA acting president. Here it is Mr. Mark Wagley’s full intervention on this issue. One of the questions posed...

PROFIT GROWTH FORUM: Dumitru Rotar, Deputy General Manager of Romgaz, expects Iohannis to request a re-examination of making the supplementary charge applied to domestic gas production permanent

Confidence needed by petroleum companies to invest the massive amounts necessary to develop new hydrocarbon resources has been often "shaken" in the recent years by fiscal measures of governments, such as the tax on special constructions or the tax on windfall gains obtained by domestic producers from the deregulation of selling prices, the Deputy General Manager of Romgaz, Dumitru Rotar, stated at Profit Growth.forum, organized by NBR's support. "Romania ranks the fourth in Europe in...

ANRE is debating gas trading rules for the Romanian Commodities Exchange, although deputies in the Committee for Industries want a monopoly for OPCOM

The National Regulatory Authority for Energy (ANRE) has put up for public debate a draft regulation and two draft procedures on trading on the centralized gas markets managed by the Romanian Commodities Exchange (BRM), although parliamentarians in the Committee for Industries of the Chamber of Deputies want OPCOM to be the only company holding the license to operate the local gas exchange. "The Romanian Commodities Exchange holds the License no. 1797/2013 for managing the centralized...

Benedikt Klauser (DG Energy): A single trading platform for gas producers in Romania will have a negative effect on market operation

A single trading platform for gas producers in Romania will have a negative effect on market operation, Benedikt Klauser, from EC's DG Energy, warns regarding changes prepared in the Romanian Parliament through which a single license is granted for the operator of the gas market. "Before talking about regional cooperation in terms of supply security or even gas hubs, it's important to put things in order at home. Many countries in the region, including Romania, still have a considerable...

Romania's petroleum companies are complaining that certain amendments voted in the Parliament endanger the industry and investments "Production is falling, companies are forced to close their wells"

The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) is concerned that certain amendments approved and voted on Tuesday by the Chamber of Deputies, in order to change the framework in which the petroleum industry is operating, endanger the sector and companies' investments. The members of the association are dissatisfied with the amendments that increase the tax rate from 60% to 80% for prices above RON 85/MWh and make permanent a temporary tax provided by GEO...

Russia opens our eyes: the abolition of bilateral contracts on the gas market leaves room for intermediaries and Russian gas imports

In a purely Romanian style, the entire dispute over the amendment of the law on energy and gas (in the first place being Ordinance 64/2016) was lost in the fog. After lengthy consultations with Parliament's specialty committee, which resulted in some conclusions difficult to swallow for the gas market players, the changes had to be voted by the end of this parliamentary session. Surely this will not happen, however, for many reasons. The most important of them is the elimination of...

Confirmation: The supplementary charge applied to Romanian gas producers will reach even 80% and the tax on liberalization becomes permanent

The tax rate on windfall gains obtained by the domestic gas producers as a result of deregulating selling prices will be increased from 60% to 80% in the event where the selling price exceeds RON 85/MWh, the rate of 80% following to be applied to windfall gains obtained from the difference between the price requested and the threshold of RON 85/MWh. Moreover, this tax, initially introduced in 2013 for a period of one year, which has been extended since then every year by 12 months, will...

The Romanian Commodities Exchange warns against the gravity of the parliamentarians' idea regarding the gas market monopoly

The Romanian Commodities Exchange has submitted to the Presidency, Parliament, Government, trade unions, employers' associations and civil society a letter in which it warns against the gravity of amendments introduced by deputies, trying to impose a single license for the operator of the wholesale centralized market, showing that it is a brutal interference of politics in economics, forecasting a administratively dictated structure of the market, without regard to its natural dynamics,...

Apostol: Decisions on the investment framework in the gas sector have to be made in the long run. Three advantages of an energy mix with increased gas share

Decisions on the investment framework in the gas sector have to be made with a long-term perspective, considering that hydrocarbons will remain an important energy source for at least the following 20 years, Daniel Apostol, Secretary General of ROPEPCA, shows. "Romania has a considerable potential for natural gas, which is an energy source that is an excellent complement for renewable energy in the transition to clean energy. One of the main goals of the Energy Union, reflected in the...

Competition council president: Romanian gas trade can happen on one bourse

The Romanian competition council supports proposals for gas trading on a single bourse if it helps build liquidity and transparency, the authority’s president told ICIS in an interview on Thursday. Bogdan Chiritoiu said existing legislation had allowed multiple platforms to operate in the gas market, but added there may be a possibility for trade to happen on a single bourse also. Chiritoiu’s statement to ICIS contradicts previous views expressed in the local press this...

Who is afraid of gas market liberalization?

    Gas market liberalization brings big emotions in society, politicians exchange sharp lines and simple people come to fear that someone - the "free market" - will "suck" money from their wallets. The society's fear is natural, given that the fear for liberalization is most often addressed in a populist tone, which, instead of clearing and calming the heated spirits, throws fuel on the fire.   The advocates of postponement of energy...

EBRD and Expert Petroleum, ROPEPCA member, join forces to enhance Romanian mature oil and gas onshore fields.

The European Bank for Reconstruction and Development (EBRD) is providing a US$ 5 million loan to Expert Petroleum, ROPEPCA member, to finance the enhancement of Romanian mature oil and gas onshore fields. As the domestic oil and gas production declines and commodity prices are lower, several existing onshore oil and gas mature fields requires investments and focus to continue to be economically viable,  compliant to the latest environmental regulations and to ensure the recovery of...

The European Commission recommends Iulian Iancu to review the amendments on OPCOM monopoly and invites him to a discussion

The Directorate-General for Energy within the European Commission invited the President of the Committee for Industries of the Chamber of Deputies, Iulian Iancu, in a letter in which it asks him to reconsider the amendments adopted to the Emergency Ordinance for gas price liberalization for producers, to a meeting on drawing up the future Network Codes. The meeting, which would be organized on 8-9 June, would be attended, besides the representatives of DG Energy, by officials of the...

BRM threatens to sue the state if it is not allowed to trade natural gas

The Romanian Commodities Exchange (BRM) intends to sue the Romanian State at the international courts of law if Parliament approves the amendments proposed by the Committee for Industries and Services of the Chamber of Deputies regarding the elimination of BRM from the centralized gas trading platforms in our country. President of the Romanian Commodities Exchange (BRM), Septimiu Stoica, stated for News.ro that he was waiting to see what the Parliament decides. According to Committee's...

GABRIEL PURICE, BRM: "Iulian Iancu wants to nationalize BRM market"

Imposing by law that gas trading should take place through a single operator, i.e. OPCOM, raises issues of competition and is a dangerous precedent, representatives of the Romanian Commodities Exchange, the other operator that currently holds the license, believe. Last Tuesday, deputies from the Committee for Industries and Services adopted a number of amendments to the Gas Law, according to which gas producers will be forced to trade entirely their production on OPCOM exchange, the...

The Ministry of Development wants the mayoralties and county councils in areas where mineral resources are exploited to receive at least 80% of the royalties

The Ministry of Regional Development, Public Administration and European Funds wants at least 80% of the royalties paid to the central state budget by the companies that exploit mineral resources in Romania to be later transferred to the budgets of the mayoralties and county councils where these exploitation activities are actually running, according to a government document signed by Minister and Deputy Prime Minister Sevil Shhaideh. As of now, an interministerial committee set up at...

Profit Energy.forum Sorin Gal (NAMR): Gas royalties will be calculated at a real price, for both import and export

The new reference price at which the percentage rates provided for in the Petroleum Law are applied for royalties, not updated since 2008, will be a real reference price, Sorin Gal, Director at the National Agency for Mineral Resources (NAMR), announced at Profit Energy.forum. The new reference price will be applied starting with the calculation of royalties charged for concessions in the 11th licensing round, to be launched this year by NAMR. "In the new formula of the reference price...

BRM reacts harshly to Iulian Iancu's intention to nationalize gas trading. It requests Dragnea's intervention

The Commission for Industries and Services of the Chamber of Deputies, led by Iulian Iancu, decided that gas trading will be made on a single platform, thus excluding from this market the Romanian Commodities Exchange, where transactions are currently being performed. "The Romanian Commodities Exchange (BRM) expresses its dismay at the decision of the Committee for Industries and Services of the Chamber of Deputies, which on 16.05.2017, at the proposal of Deputy Iulian Iancu (the...

The European Commission considers that several gas trading platforms should be allowed to compete

European Commission considers that trading gas at a rate of 100% through a single platform, respectively OPCOM, is not recommended, says a letter from DG Energy sent on 16 May to the President of the Committee for Industries of the Chamber of Deputies, Iulian Iancu, sources in the energy sector have stated for HotNews.ro. According to it, there must be a balance by allowing competition between trading platforms. Granting exclusive rights to OPCOM would raise issues related to competition...

EXCLUSIVE Gas producers will be required to trade the entire production on centralized markets managed by a single operator

All transactions on the wholesale gas market will be managed by a single operator and gas producers will be required to trade the entire production on the centralized market. All these provisions are included in the admitted amendments, proposed by the parliamentary group PSD, in the report of the Committee for Industries and Services of the Chamber of Deputies to the bill approving the Government Emergency Ordinance 64/2016 amending and supplementing the Electricity and Gas Law 123/2012,...

EXCLUSIVE How the state plans to control the wholesale gas price or take advantage of possible price increases. When the supplementary charge on exports appears

Authorities want to discourage the increase in prices on the wholesale natural gas market or take advantage of potential increases by increasing from 60% to 70% or 80% the tax on windfall income obtained by producers as a result of the deregulation of selling prices, in case these prices exceed RON 85 or 90/MWh. Moreover, the respective tax, initially introduced in 2013 for a period of one year, which has been extended since then every year by 12 months, is planned to become a permanent...

The Committee for Industries: A single operator of the wholesale gas and energy market, according to the Western European model, increases market liquidity

The Committee for Industries of the Chamber of Deputies completed on Tuesday the bill approving the Ordinance for the amendment of the Gas Law, the provisions including the existence of a single operator of the wholesale gas and electricity market, OPCOM, according to the Western European model, a press release issued Wednesday shows. "The Committee for Industries and Services completed, on 16 May, the report on the Law approving the Government Emergency Ordinance 64/2016 (issued by...

Badin, Deloitte: There are signals that it is intended to increase the supplementary charge on gas production to 70-80%

There are signals that authorities plan to extend indefinitely the 60% tax on windfall gains obtained by gas producers from price deregulation in this sector and even to increase the tax rate to 70-80%, Dan Badin, tax partner at Deloitte Romania, announced at Profit Energy.forum. "It has been recently decided to maintain for this year the 60% tax on windfall gains from gas price deregulation. There are signals that the authorities plan to extend indefinitely the application of this tax...

How the gas market can blow up: there are no two ways about it and there's no competitive market

Yesterday, the Commission for Industries and Services of the Chamber of Deputies adopted the bill approving the Government Emergency Ordinance 35/2014 for supplementing the Electricity and Gas Law 123/2012. The meeting was not public, but it is assumed that the decisions made are based on repeated consultations with the natural gas market actors, formal consultations apparently, because none of the views of those actors was taken into account. "The actor went out in the street," but in...

DANIEL APOSTOL, ROPEPCA - "The establishment of a monopoly on the activity of centralized markets is unjustified in the gas sector"

The establishment of a monopoly on the activity of centralized markets, respectively the maintenance of a single centralized market for natural gas trading is unjustified, said Daniel Apostol, Secretary General of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), referring to the fact that Parliament intends to establish a state monopoly on natural gas trading, as well as that existing on the electricity market, by approving the Government Emergency...

Harald Kraft (ROPEPCA): The allegations that the oil industry has too high profits and pay too low taxes are 'fake news'

There are these public allegations according to which the oil and gas producers in Romania are making too high profits and they are paying too low taxes; these are "fake news". The Romanian Government's total gains from the oil industry are among the largest in Europe, said, at Profit Energy.forum, the elected president of the Romanian Association of Petroleum Exploration and Production Companies (ROPEPCA), Harald Kraft . Romanian authorities have acted anti-cyclically: other states...

The state places guns on gas producers. The Government is introducing an additional tax on profits

The Government is introducing an additional tax on profits and the Parliament wants, in turn, to increase the supplementary charge on income. The Committee for Industries of the Chamber of Deputies accuses gas producers that they have already increased prices by over 20%, after 1 April, and proposes an increase in taxes on income obtained from price increases. Debates in the Committee for Industries of the Chamber of Deputies ended with circus last week. Committee President Iulian Iancu,...

Economy Minister: The new law on royalties will be ready by 15 May

The new system for the calculation of royalties will be ready by 15 May and put up for public debate by the Ministry of Finance, Economy Minister Mihai Tudose stated in an interview with News.ro. Royalties currently in force are percentages of gross value of production extracted, being established in 2004 under the Petroleum Law. "We have a first differentiation. Those from the current exploitations, onshore and offshore, where we are pioneering in everything that these deep-sea...

Amendments to GEO 64 on the gas market have attracted the attention of the European Commission. Deputies of the Committee for Industries and Services gave explanations to a European expert

Debates on changes in the gas market to be brought to the Government Emergency Ordinance no. 64/2016 were delayed yesterday by the Committee for Industries and Services of the Chamber of Deputies. The reason: deputies in the Committee gave explanations on amendments brought to GEO 64 to an expert of the European Commission, for two hours and a half. Therefore, it was decided that the meeting of the parliamentary committee wouldn't be made public, which has aroused the dissatisfaction of...

The gas market is boiling again: competition among trading platforms is not pleasing the deputies

The Committee for Industries and Services of the Chamber of Deputies could make a decision today derailing everything that has been built in the recent years for gas market liberalization and for getting it closer to the performances of the electricity market. After having resolved in a unique manner the issue of liberalization commitments as of 1 April, to shut down the European Commission and get rid of infringement, the deputies are now addressing the "details" related to the smooth...

Gabriel Purice, the Romanian Commodities Exchange: "The state only wants its own exchange for gas trading"

The Romanian Parliament intends to establish a state monopoly on gas trading, as it happened on the electricity market, stated Gabriel Purice, President of the Romanian Commodities Exchange (BRM), pointing out to the amendments proposed to the law on the approval of the GEO 64/2016, on the liberalization of the gas market, which supplements the Energy Law 123/2012. In the amendments tabled by the PSD and debated in the Committee for Industries and Services of the Chamber of Deputies, it...

Amendments to GEO 64/2016 on the gas market cause a real revolution in the field: there will be only one wholesale exchange, producers will be forced to trade on the exchange the entire amount of gas, traders are differentiated from suppliers, a gas comparator will be established, new markets (such as the Day Ahead Market, the Intra-Day Market, the Balancing Market, the Market for Household Customers), as well as gas transmission agents (shippers) emerge. However, perhaps the most important...

Ioana-Andreea Lambru, Deputy Secretary General of the Government, takes over the coordination of the National Agency for Mineral Resources

Ioana-Andreea Lambru, Deputy Secretary General of the Government, will coordinate the activity of the National Agency for Mineral Resources (NAMR), pursuant to a decision of PM Sorin Grindeanu, published Friday in the Official Journal. According to the decision, State Secretary Ioana-Andreea Lambru "shall exercise the duties of coordinating the activity of the National Agency for Mineral Resources, (...) and shall sign all the necessary documents in order to exercise the duties". On 30...

Government extends a tax that brings money to the budget and could increase Romanians' bills

Government does not give up a tax applied to gas producers, as it had to, because this is an important resource for the budget, and increased public sector salaries and increased pensions have to be paid from somewhere, right? More specifically, it's about the 60% tax on windfall gains obtained by deregulation by economic operators carrying out cumulatively extraction and sale activities on the territory of our country, imposed in 2013. Until the beginning of this month, the regulated gas...

Association: In Romania are over petroleum fields and 13.000 producing wells

In Romania there are currently over 400 petroleum fields and over 13.000 wells active, according to data sent Thursday by the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), which considers that the oil extraction sector has an important contribution to the state budget, but depends directly on how the state encourages long-term investments. "To maintain constant the level of oil and gas production, significant investments are required, as well as a stable,...

Petroleum companies will pay supplementary tax on income from production. If exports of production, the tax will be higher.

Companies producing oil and gas will pay, besides royalties and the standard corporation tax of 16%, a supplementary charge applied on profits from the production of oil and gas. For what is produced and used in Romania, the tax will be lower, and for oil and gas exports it will be higher. The specification was made in an interview granted by Finance Minister Viorel Stefan for Mediafax agency. We present below the full answer of the minister to the question related to the new taxation...

The Ministry of Economy promises oil companies dialogue during the preparation of the law on royalties and invited them to submit their views

Economy Minister Mihai Tudose met on Wednesday with the delegation of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), led by Harald Kraft, with which he discussed about petroleum royalties and modalities of approaching the new law on royalties. The Economy Minister announced that it was agreed that, during the preparation of the law on royalties, there will be dialogue within the interministerial group established at ministry level, and ROPEPCA was...

Deloitte: Romania increased taxation in the oil and gas sector, contrary to the trend in most European states

Despite the difficult period crossed by oil producers at global level as a result of low oil and gas prices, in Romania, unlike most of the European states, the average effective rate of royalties and other similar taxes (the tax on windfall gains, tax on special constructions, tax applied on income from the exploitation of crude oil) has increased. This is the conclusion of Deloitte study "An overview on royalties and similar taxes. Oil and gas upstream sector across Europe". According...

The only certainty on the new petroleum royalties: For offshore they will be lower than for onshore production

Romanian officials no longer advance deadlines for completing the legislation on new petroleum royalties. The only certainty is that royalties for offshore production will be lower than for onshore. "The logic is to be different. The costs are different for an onshore well compared to an offshore well. Petroleum royalties for offshore will be lower than those for onshore", Economy Minister Mihai Tudose, one of the persons in charge with the new law on royalties, stated for ECONOMICA.NET....

Taxation for Romanian O&G industry rose, while international prices collapsed

The average effective rate of the royalties and other taxes imposed on the oil and gas industry in Romania has increased from 15% in 2014, to 16.9% in 2015 and 17.5% in 2016, while in most European states it decreased. The trend observed by the experts at Deloitte manifested within an interval in which the international crude oil price dropped from about 100 dollars per barrel (in 2014) at a minimum of 30 dollars per barrel, in 2016, to return at present close to 50 dollars. The Deloitte...

Government approved a calculation formula for windfall gains in the gas sector, as a result of deregulation

Government has approved a technical formula to calculate windfall gains obtained as a result of gas price deregulation. "As a result of deregulation of prices in the gas sector, Government has operated a technical modification of the formula to calculate windfall gains provided for in the annex to Government Ordinance 7/2013. Thus, as of 1 April 2017, the element in the formula referring to the regulated price is replaced with a reference to the price realized in the...

ANRE adopted the methodology for calculating gas prices as a result of liberalization of transactions as of 1 April

The National Regulatory Authority for Energy (ANRE) yesterday adopted an order setting the methodology for calculating gas prices as a result of liberalization of transactions as of 1 April. The order issued on Wednesday amends and supplements the Methodology for setting the revenue per unit related to the regulated supply activity, carried out in a regulatory year, and approving regulated prices in the natural gas sector, and is intended to explain the modality of formation of the...

ANRE: The gas market for population to be half liberalized as of 1 April. The final price for household consumers will continue to be regulated

Niculae Havrilet, President of the National Energy Regulatory Authority (ANRE), stated on Tuesday that if the Government fails to amend by 1 April GEO no. 64/2016 adopted last year by Ciolos Cabinet, which is less likely, as of that moment the Government will no longer establish the price at which local gas producers sell to suppliers production intended for household consumers, the price following to be liberalized and determined exclusively by supply and demand. In turn, ANRE will...

Why the liberalization of the natural gas market shouldn't be postponed?

by Otilia Nutu These days there are discussions to delay gas market liberalization for household consumers. By 3 or 6 months, something to delay a little so that the regulated suppliers losing their monopoly can be happy; but, at the same time, so that the European Commission does not get upset either, because it gives us money to consolidate the gas network if we comply with the European law. As it cannot be done otherwise, obviously, we are discussing about an Emergency Ordinance that...

Romania has created all conditions to import as much gas as possible from Russia; exports should wait

The National Institute of Statistics informs that gas imports increased in January by over 270% compared to imports in the same month of last year, which represents slightly more than 30% of the domestic consumption. Obviously, the three weeks of cold in January made many thermal power plants to switch to gas operation, while household consumers with gas as heating source contributed to this growth. It would be interesting to know the price at which gas was imported and what is its...

Gas imports increased by 271.5% in January; production went up only 0.2%

Romania imported in January 2017 an amount of usable gas of 281,200 tons of oil equivalent (toe), by 271.5% (205,500 toe) higher than the amount imported in the similar period of 2016, according to data centralized by the National Institute of Statistics (INS). Domestic gas production totaled, in the first month of the year, 742,000 toe, being by 1,200 toe (0.2%) higher than that reported for January 2016. According to the draft Energy Strategy of Romania, published on the website of the...

Romania imported in January over 729,900 toe of oil

Romania in January 2017 imported a quantity of crude oil of 729,900 tons of oil equivalent, by 218,100 toe (42.6%) more than in the similar period of the previous year, according to data centralized by the National Institute of Statistics (INS). Oil production totaled 295,500 toe, being by 2.2% (6,800 toe) lower than in the similar period of 2016, AGERPRES writes. According to the draft Energy Strategy, published on the website of the Ministry of Energy, it is estimated that oil...

INTERVIEW Metea (Romgaz): Higher taxation could "survive" for a period after gas market liberalization; in 2016, we paid RON 291 million

Romgaz last year paid a tax on windfall gains in total amount of RON 291.44mln, and this higher taxation could "survive" for a period, as intermediary phase, after gas market liberalization, Virgil Metea, General Manager of Romgaz, has stated in an interview with AGERPRES.According to him, with gas price liberalization, a summer/winter seasonality of prices could occur, and the most important thing is that, from a social point of view, those in need can be supported through coherent...

Gas prices in the hands of Liviu Dragnea

Liviu Dragnea invites this week, in the Parliament, PM Sorin Grindeanu, Economy Minister hai Tudose and Energy Minister Toma Petcu to a discussion on the amendment and supplementation of the Electricity and Gas Law, more precisely to make a decision on gas prices to be paid by population as of 1 April. According to a statement made by PSD President, the discussion will also be attended by Iulian Iancu, President of the Committee for Industries of the Chamber of Deputies, and specialists....

Royalties collected by the Romanian state for the exploitation of resources fell for the second year in a row

Although the state collects increasingly less money from taxes for the exploitation of petroleum and mining resources, the draft amendment to the law on royalties is dragged from one month to another. Royalties collected by the Romanian state for the exploitation of oil and gas resources fell 17% in the first nine months of last year, compared to the same period of 2015. According to data of the National Agency for Mineral Resources submitted to Capital, their level reached only RON...

Only after regulating the fiscal framework in the field will NAMR put up for concession 28 petroleum blocks

The National Agency for Mineral Resources (NAMR) will put up for concession 28 petroleum blocks, of which 6 onshore offshore, but only after regulating the fiscal framework in the field, according to data submitted by the institution at News.ro request. An interministerial working group is working on the draft for the new system of calculation of royalties. The auction for the 28 blocks is part of the future Round XI for the concession of new petroleum exploration blocks, which NAMR has...

Why Romania risks losing EUR 180mln for BRUA gas pipeline and pay huge fines to the European Commission

Full liberalization of acquisition prices for gas from domestic production, as of 1 April, stirs disputes between the key players in the market. Distributors, which are also the main suppliers, are against liberalization, while producers want to get rid of regulations. National gas transmission operator Transgaz has a neutral position, despite the fact that blocking liberalization, as distributors require, would be unfavorable. Discussions are heated especially in the context in which the...

Serinus Announces Closing of Offering for Gross Proceeds of CDN$25.2 Million

Serinus Energy Inc. ("Serinus", "SEN" or the "Company") (TSX:SEN)(WARSAW:SEN) is pleased to announce the closing of its previously announced marketed offering (the "Offering") of 72,000,000 common shares in the capital of the Company (the "Offered Shares") at a price of CDN$0.35 per share for aggregate gross proceeds of CDN$25.2 million (the "Total Offering"). The Offering was led by GMP FirstEnergy (the "Agent") on a "commercially reasonable efforts" agency basis. The Company's major...

Supplementary charge in the gas sector should be eliminated as of 1 April

The Competition Council believes that, as of 1 April 2017, the taxation system in the gas sector should be reviewed, considering that the liberalization process will end. "In the perspective of full deregulation, as of 1 April 2017, it is necessary to review the taxation system in the gas sector, given that the liberalization process will end, so there will be no differentiation (in terms of trading conditions) between gas from domestic production - which for the regulated segment had...

Sorin Gal, NAMR: The law on royalties in being discussed in an interministerial group led by the Ministry of Economy

It is estimated that production in the Black Sea will start in 2019, but there are many steps to take. From 2013 until the end of 2016 a law on taxation in the oil industry was in progress at the Ministry of Finance, together with the IMF and the World Bank. At the end of 2015, Minister Dragu (Anca Dragu, former Finance Minister - Ed.) announced that the law was completed and passed to the following Government. The law on royalties in being discussed in an interministerial group newly...

ROPEPCA warns on the increase in hydrocarbon imports: Domestic gas producers are fiscally discriminated

Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) warns on the latest evolutions in the oil and gas market and requests public policies to encourage keeping the domestic production of hydrocarbons. According to data recently published by the National Institute of Statistics (INS), Romania's gas imports last year increased by 629% compared to 2015, reaching 1.185 million tons of oil equivalent, while the domestic gas production fell in 2016 by 12.5%, totaling...

Ionut Misa, MFP: The draft law on royalties will be ready in the first quarter of this year

The draft law on petroleum royalties will be completed in the first quarter of this year, Ionut Misa, Secretary of State in the Ministry of Finance, announced at the annual conference organized by PwC. According to the representative of the Ministry of Finance, an interministerial committee was established, which analyzes the draft and will complete it in the first part of this year. "Currently, the management of the committee is provided by the Ministry of Economy. All players are at...

Oil and gas discoveries dry up to lowest total for 60 years

Discoveries of new oil and gasfields have dropped to a fresh 60-year low, as companies put a brake on exploration and large fields have become harder to find. There were only 174 oil and gas discoveries worldwide last year, compared to an average of 400- 500 per year up until 2013, according to IHS Markit, the research group. The slowdown in exploration success shows that the world is likely to become increasingly reliant on “unconventional” resources such as US shale oil and...

Expert Petroleum resumed Petrofac's activity in Ticleni

Leadership of Gorj County Council and Targu Jiu Municipality met late last week with the heads of Expert Petroleum, after taking over the Romanian subsidiary of Petrofac. The takeover included the over 800 employees. Vice-President of County Council, Ciprian Florescu, says that despite the fact that Petrofac had debts and was to lay off some of the employees in Ticleni, the new partner of OMV Petrom in this locality has promised to retrofit the company and keep the current jobs and create...

The new royalties, set depending on the rarity of resources

Economy Minister Alexandru Petrescu declared on Thursday  that pesently work is in progress for the draft on the new system for the calculation of royalties  claiming that investors need a very clear picture of royalties, which should also be set depending on the rarity of resources at regional level. "I will not stop for a moment to put myself in the position of the investor that wants to invest, needs to prepare a business plan and should reach, through a single click, a very...

Grindeanu Government, as Ciolos Government, risks underestimating the revenues from the tax on gas price liberalization

The government has budgeted for this year by 7.48% more income from the controversial windfall tax gains as a result of price liberalisation in the gas sector, despite the fact that the very existence of this tax led to lower domestic production last year. In 2017, the Grindeanu Government estimates to collect additionally from this tax over RON 50mln, from the preliminary level of RON 659mln in 2016 to one of RON 708.5mln in 2017. Grindeanu Government is not the first Cabinet risking to...

Changing the Law on royalties, back in the starting block

Changing the Law on royalties entered the fourth year when it is waiting its turn to make it to the list of priorities of governments that have succeeded at Victoria Palace. At the end of mandate, the technocrats announced us that they had completed a draft, but left the task of adopting the new law to Grindeanu Cabinet and the future Parliament. The Government  adopted last week a note on drawing up a legal act to systematize royalties in the field of mineral resources. Nobody said...

Royalty estimates in the budget don't seem to take into account the recent steps taken by the author

Grindeanu Government will either not amend the regime of royalties this year either it will change it only marginally, so that the revenues from this tax increase with only a modest level. According to the draft budget, revenues from concessions, category which includes mostly (over 77%) revenues from royalties, will increase in 2017 by 5.11% compared to the preliminary level of 2016. In 2018, year when the difference from revenues should be seen, if the Government changed the royalties...

The Government considers the

The Government approved in the meeting held on Wednesday a note regarding drawing up a legal act to systematize royalties in the field of mineral resources, in the conditions that the Government program based on which the Executive received the vote of confidence of the Parliament provides for a supplementary charge of at least 20% on profits obtained from the production of natural resources, to the extent in which these resources are not processed in Romania. Thus, Grindeanu Cabinet had...

Aurel Gheorghe replaces Gheorghe Duțu as the president of ANRM

Aurel Gheorghe, who held until now the position of head of the General Directorate for Management, Evaluation, Resources Concession of the National Agency for Mineral Resources (NAMR), has been appointed as president replacing Gheorghe Duţu, according to a decision of the Prime Minister Sorin Grindeanu, published on Monday in the Official Gazette. According to his LinkeIn page, Aurel Gheorghe have been general manager at the NAMR since 2013. Previously, Aurel Gheorghe worked as a geologist...

The law on royalties will also include a tax of 20% on the profit obtained from oil or gas export - Viorel Stefan

The legislative package on taxation in the field of hydrocarbons will contain, besides a new formula for determining royalties, a supplementary charge of 20% on oil and gas production which is not processed in the country, Viorel Stefan, proposed for taking over the position of Minister of Finance, stated on Wednesday, after hearings in the specialized committees. "In the royalty scheme we will impose a supplementary charge of 20% on the profit made from selling natural resources without...

When do we fully liberalize the gas market?

Author: Daniel Apostol, Secretary General – ROPEPCA The Government issued an emergency ordinance making two amendments to the gas law. The first amendment refers to article 124, which initially provided that gas producers should make available the quantities required for the winter to the regulated market first, that is to domestic consumers and to heat generation units (heat plants). „This request came from the European Commission, which showed that a legal provision...

Gas imports increased by 720% in the first 10 months; production fell 13.9%

Romania imported in the first ten months of 2016 an amount of usable gas of 620,900 tons of oil equivalent (toe), by 720.2% (545,200 toe) higher than the amount imported in the similar period of 2015, according to data centralized by the National Institute of Statistics (INS). Domestic gas production totaled, during January - October 2016, 6.122mln toe, being by 991,800 toe (13.9%) below that reported during the first ten months last year. According to the draft Energy Strategy of...

Legislative changes for local and regional energy security

Authors: VARINIA RADU Partner CMS, Head of Oil&Gas in Central and Eastern Europe and RAMONA DULAMEA, Senior Associate CMS Romania This article is currently available only in Romanian.

Poor legislation increases gas imports by over 8 times

Gas imports increased by 820.2% during 1 January - 31 October , according to data from the National Institute of Statistics (INS). In the same time, national production fell 13.9%. Moreover, Romgaz, the largest national producer, owned by the Romanian state, announced a decrease by 26% in production in the first 9 months of the year. The reason is very simple: because of taxes paid only by national producers, Romanian gas has become more expensive than the Russian gas (the only source of...

Will we cheat gas price liberalisation starting 1st of April 2017?

The Government had recently issued an Emergency Ordinance establishing two changes in the Electricity and Natural gas law. The first change refers to article 124, which initially stipulated that all natural gas producers have to make available, with priority, for the regulated market (meaning for household consumers and thermal power plants) the amounts necessary for the winter period. The President of the National Energy Regulatory Authority (ANRE), Niculae Havrilet, declared during the...

How did Romania yield to Russia 25% of the domestic gas market. The suspect mechanism that strikes both budget and economy

Russian companies reached in November 2016 a share of 25% in Romania's natural gas market, compared to only 5% in January. The mechanism that made this possible is complicated and it is difficult to know, today, whether it's about incompetence, bad faith or lack of vision. Beyond the increase in dependence degree, there are also 2 other prejudices: a budgetary prejudice, by the state losing important income an economic prejudice for Romgaz, that decreased its...

Romania has natural gas only for a decade?

Few days ago the draft Energy Strategy of Romania was completed. Before any discussions on the substance, I consider it is necessary to treat a statement widely debated after the apparition in the public space of the document, that being: "Romania has natural gas only for one decade?" The geological natural gas resources (excluding those in the Black Sea), according to the data presented in the draft Energy Strategy, are estimated at approximately 700bcm, but proven, probable and...

"Nowhere in our region were found favorable conditions for shale gas exploitation"

Periodically, debates arise in the public space on the precious natural resources of Romania, more precisely of oil and gas resources: what risks of their exploitation for the environment and inhabitants? Is there shale gas in Romania? Do we still have un-explored oil resources or we will end up depending on resources from Russia and Central Asia? We've talked about all these with Mihail Batistatu, Professor at the Petroleum University in Ploiesti, and some conclusions were made clear:...

The level of royalties will remain the same. The new law project is finalised - MPF

The draft project on oil royalties was completed by the Ministry of Public Finance and stipulates maintaining the actual level of taxation for the industry, granting in the same time deductions for offshore investments, Finance Minister Anca Dragu announced on Thursday, during a conference of balance after one year of governance. "The draft law is completed at the Ministry of Public Finance. We hold technical discussions on this project, we have also collaborated with experts from the...

Energy Strategy: Romania will reach rock bottom in oil and gas - infographic

Production of oil will decrease in the period 2016-2030, risking to reach zero after 2035, in the conditions of low oil quotations, while natural gas production could have the same trajectory after 2045, according to the draft of Energy Strategy 2016-2030, launched for public debate by the Ministry of Energy. The energy mix of Romania will suffer important changes in the following 20-35 years, the production of  oil, natural gas and coal shall fall significantly and will represent...

Gal (NAMR): We have prepared a draft project to amend the Petroleum Law; after the elections the project will be sent to the Parliament

The National Agency for Mineral Resources (NAMR) has prepared a draft amendment to the Petroleum Law, which will be submitted in the Parliament after the elections, Sorin Gal, Managing Director of the General Directorate for the Management, Evaluation and Concession of Petroleum Resources/Reserves of the National Agency for Mineral Resources (NAMR), said on Wednesday. "With the two large employers' associations in the petroleum industry, ROPEPCA (Romanian Petroleum Exploration and...

Havrilet (ANRE): Romania could import 40% of the national gas consumption this winter

Romania could import 40% of the national gas consumption this winter, given that the price of natural gas in the international markets will be even with RON 20/MWh lower than the price of gas from domestic production in storage facilities, declared, Tuesday, Niculae Havrilet, President of the National Regulatory Authority for Energy (ANRE). "The price of imported gas is more competitive, and suppliers head to this source. The moment the import prices are low, imports may account for as...

From the series: hidden are the authoritie's ways! Today the case of natural gas

Authorities "manage", through "puzzling" decisions, to bring damage to the budgets of companies and the state budgets! It seems that no one sees further than the end of nose! Afterthe oil sector, today we will present the gas case and how authorities manage to stumble themselves! The fact is that, while in mid this year, they refused gas price liberalization, as of 1 April 2017 the gas market is fully liberalized, including for population! Under these circumstances, the state should...

Stratan, ROPEPCA: Investments depend on the strategy, fiscal regime and the oil price

Romanian oil and natural gas needs investments of around one billion euros annually just to finance the current needs and development, but without the fiscal system and energy strategy in place, there would not be any new investments, says Artur Stratan, President of the oil and gas association ROPEPCA. The industry also needs a higher oil price, and it was externally agreed that 60 USD per barrel for oil would balance the situation and allow new investments. He said the industry has no...

Foreign Investors Summit 2016 – Day 2

Industry Zoom: Energy Adina Georgescu – Counselor to the Prime Minister, Energy & Environmental Issues The role of a government is to set the legal framework that encourages investments. We are close to finalizing the energy strategy. In the Romanian energy sector we moved forward towards the creation of a transparent and non discriminatory gas market. Predictability and stability is the legal framework is important and Romania does not have a good image, especially...

From the series: hidden are the authoritie's ways!

Sometimes we wonder who makes the laws and why?! They are so obscure and tangled. Moreover, sometimes, they only bring damage to the budgets of companies and the state budgets! Today we will present the case of oil and how authorities manage to stumble themselves. In the recent years, the oil sector has been in a real crisis. From a price of almost USD 150/bbl in mid-2008, oil fell to less than USD 40/bbl in early 2009, then it gradually climbed to around USD 115/bbl in mid-2014 and...

What will we do when we run out of oil? The response of a Rompetrol manager

Global oil reserves will deplete within 50 years, according to a strictly theoretical calculation made by the giant British Petroleum (BP). Marius Ghica, corporate development manager at KMG International (former Rompetrol Group N.V.), speaks of the possibility of such a scenario and of what might happen with the large oil companies in such a situation. The answer to this question is not universal among experts in the field, but the main idea often remains the same and is best resumed by...

Low oil prices leave Romania’s oil reserves dry. Reserves drop sharply.

Romania's hydrocarbon reserve replacement rate has droped dramatically lately, as a result of low oil prices. It reached only 25% and, in the lack of new discoveries, oil reserves will be depleted within the next12 years. Investment are less by each day, due to low oil prices. OMV Petrom, the only oil and gas producer in Romania, reported, for 2015, a reserve 1P reserves (proven reserves)  replacement rate of 25%, according to data made public by the company in Fondul Proprietatea's...

Energy Minister: We must urgently address the declining of the oil and gas reserves

Romania has to start  as of tomorrow morning to solve the problem of the decline of oil and gas reserves as petroleum projects require a long period of time to be developed, Energy Minister Victor Grigorescu said on Wednesday. He participated at a conference where the representatives of the resort ministry made public the first preliminary data of the final draft of the Energy Strategy of Romania 2016-2035. "First we have taken a look at proven reserves and all analyzes show...

Romania imports one third of gas it consumes from Russia

Presently, the system is close to the operation limit. Although last year the authorities said we had achieved energy independence, at this moment imports from Russia account for almost one third of the entire consumption. The situation is a first for October, in the past 25 years. The main reason is that Romgaz has shut off several wells and production fell. Currently, the domestic production should exceed 30 million cubic meters. It amounts to 23 million cubic meters and 9 million...

Black Sea Oil and Gas 20-21 October 2016, Sofia, Bulgaria

BLACK SEA OIL AND GAS 2016 Unlocking the potential of the Black Sea through exploration and infrastructure projects The Fourth Annual Conference Hilton Hotel, Sofia, 20- 21 October 2016   A new region for your business development plans   Identifying the right business development opportunities is extremely important in the current context of oil prices. For this reason, oil and gas companies are focusing on stable, easy-to-do business regions,...

Mark Wagley - ROPEPCA: Let’s keep the jobs and revenue in Romania!

All discussions on Romanian O&G industry begin with aknowledgements on the long and strong history this industry has. However, the future of the onshore O&G sector seems to be endangered, more and more, every year. The prices on the international markets, the characteristics of the local geology, the uprising of electricity as a convenient replacement for hydrocarbons, the lack of perspective from the Romanian authorities in regards to the industry -  these are all reasons of...

Energyworld Magazine

Download the magazine in PDF format.  Source: www.energyworldmag.com

energynomics.ro has released its 2016 Energy Strategy Summit report

The press conference for the launch of the 2016 Energy Strategy Summit official report brought into attention and a new synthesis of the main points of interest of the energy industry regarding the future national energy strategy. At the event participated as speakers Artur Stratan (ROPEPCA President), Claudia Brandus (RWEA President) and Silvia Vlasceanu (ACUE Executive Director) – representatives from three of the most representative associations in the onshore oil and gas, in the...

Romania's gas reserves to be over within 9 years and oil reserves - within 12 years (ROPEPCA)

Romania's proven gas reserves will be over within the next 9 years and oil reserves - within 12 years if investments for new hydrocarbon discoveries are not made, Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Wednesday at a press conference. "The degree of depletion of oil resources is 90%. We have the possibility to produce hydrocarbons in Romania only for a limited period, i.e. 12 years for oil and 9 years for...

Companies in the petroleum industry say that approving petroleum agreements is hampered by ministries that make unnecessary comments and do not have specialists

The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) advertise the "extremely long and deeply bureaucratic" process of approving the Addendums to the petroleum concession agreements in Romania, which has a negative impact on investment, generating losses in the economy and reduces the number of jobs, stated Friday for News.ro the General Secretary of the Association, Daniel Apostol. As such companies request amending the legislation so as to set deadlines for...

Interview with Sorin Gal(NAMR): Oil&gas exploration projects worth over USD 100 mln blocked in Romania

Petroleum companies have pending projects of over USD 100mln, because they cannot reach agreements with landowners where exploration and production operations would be conducted, Sorin Gal, General Manager of the General Directorate for Management, Assessment and Concession of Oil Resources/Reserves of the National Agency for Mineral Resources (NAMR), stated in an interview with AGERPRES. In his opinion, the oil industry legislation has to be amended as soon as possible, given that the...

Stratan, ROPEPCA: An oil price of USD 50-60/bbl ensures only the survival of the oil industry

At an oil price of USD 50-60/bbl, the oil industry can only survive, and that with the condition of drastic optimization of operating costs, Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated for News.ro, entioning that oil companies currently face great difficulties. Global oil price has rarely exceeded the barrier of USD 50/bbl from December last year to date, when it stagnates around USD 47/bbl (Brent). This situation...

Black Sea Oil and Gas 20-21 October 2016, Sofia, Bulgaria

Black Sea Oil and Gas is an unparalleled top-level forum of all stakeholders who are actively working in the Black Sea region or are  interested to get involved in new projects including offshore opportunities and development of gas transportation infrastructure in the region. The event opens commercial opportunities and brings NOCs, IOCs, pipeline consortium, government officials, technology providers, pipeline producers and EPC contractors from Romania, Bulgaria, Georgia,...

ROPEPCA: Keeping the oil and gas production at the current level requires investments of EUR 1bn per year in Romania

Keeping the current level of oil and gas production in Romania requires annual investments of EUR 1bn, in conditions in which production suffers a natural decline of 10%, according to the portal desprepetrol.ro, launched by the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA). The site brings together relevant facts and figures about Romanian oil sector for a better understanding of it by the public. According to the portal, Romania has almost one third of...

Dragu:

The royalties law will be presented to the Parliament for debate after the holidays, stated yesterday the Ministry of Public Finance Anca Dragu. "We are in our last meters and at the beging of the parlimentary sessions for sure the bill will be in Parliament for debates" stated Dragu yesterday, while respondng to questions regarding the situation of the royalties law, accoding to Mediafax.  Immediately after takeover of the Ministry of Public Finance, Anca Dragu...

Oil companies want access to private lands for prospecting and drilling without going to court

"The Petroleum Law must be amended by introducing a right of superficies for concessionaire companies in relation to land where prospecting and exploration works must be conducted, right of superficies with fair compensation if crops are damaged or destroyed. Also, all petroleum operations should be declared of national public interest", Stratan said at the conference "In the News. Energy", organized by the News.ro media agency. The right of superficies consists of the ownership of a...

27 essential ideas after Energy Strategy Summit 2016

Romania has a strong energy system, the largest in the region, it has natural resources and it has extensive experience in each of the energy sectors. This was tha starting point for the debate on national energy strategy, organized by energynomics.ro, where more than 20 top representatives of the companies and the authorities in the energy industry attended as speakers. Victor Grigorescu, Minister of Energy There are two key elements for the new Energy Strategy of Romania:...

Implications of Romania’s new public procurement package on the energy sector

As previously reported, on 10 May 2016, the Romanian Parliament adopted a public procurement legislative package intended to transpose EU public procurement directives. The most important change in the legislative package is the exclusion of oil and gas exploration activities from the scope of the procurement rules. Furthermore, procurement by entities operating in the water, energy, transport and postal services sectors will be governed by a separate law. Under the new package, the...

Romanian Courts decide on land access in favour of petroleum companies

For the last few years, Romanian landowners have unjustly prevented titleholders from conducting petroleum operations on blocks and land, claiming that the easement rights granted to titleholders under the Petroleum Law represent expropriation. The landowners’ denial of access has mostly related to shale gas exploitation and is based on landowners’ insufficient understanding of the process. Instead of simply terminating their petroleum agreements with the landowners, some...

“Protected consumers” under the new draft energy law

On 28 April 2016, the Romanian Ministry of Energy published the draft amendment to the Electricity and Natural Gas Law and requested consultation. The draft amendment is aligned with EU Regulation no. 994/2010 concerning measures to safeguard the security of the gas supply and improves Romanian authorities’ ability to respond to gas disruptions. The draft amendment aims to reduce the risk of future gas supply crises by guarantying gas supplies to households and other protected...

Industrial victims of cheap oil

Low oil price makes the first victims in our country. One of the oldest companies seeking oil and gas resources entered into insolvency. Thousands of people were already sent to unemployment and on oil fields hundreds of wells lie abandoned. Blocking investments in the field will affect, more or less, 80,000 employees, representatives of oil companies say. A year and a half from the collapse of oil prices was too much for Romanian companies in the field. "Prospectiuni", a 65-year old...

Daniel Apostol, ROPEPCA: The state plans to introduce a supplementary charge on profit for oil companies

Authorities are discussing the development of a new Petroleum Law, which will include a new corporate tax for oil companies, Daniel Apostol, Secretary General of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Thursday during a debate on the future Energy Strategy of Romania. "We have in discussion a new Petroleum Law, which, besides the issue of royalties, provides for a supplementary charge on profit. The upside is that the tax on special...

Spanish giant Repsol pumps other EUR 15mln in oil exploration in Romania

Spain's Repsol invests EUR 14.6mln in Romanian companies operating the four oil exploration blocks, together with OMV Petrom. The biggest investment of EUR 6.35mln, is made in Repsol Targoviste SRL, according to data from the Trade Register related to February. At Repsol Baicoi SRL, the share capital increase is by EUR 3.39mln, Repsol Pitesti SRL - EUR 2.78mln and Repsol Targu Jiu SRL - EUR 2.10mln. "Spain's Repsol is among the few that are still investing in oil exploration in Romania",...

Prospectiuni SA, a company controlled by Ovidiu Tender, became insolvent.

Trustee will be Euro Insol The Bucharest Court on Tuesday upheld the claim filed by Prospectiuni S.A. to become insolvent in order to reorganize the company. In the same decision, Euro Insol company was appointed insolvency trustee. Prospectiuni S.A. is a Romanian company with private capital with shareholders among which Tender SA, a company controlled by businessman Ovidiu Tender, and SIF Muntenia. According to a press release of Euro Insol, the company it was founded in 1950, with the...

When they explore oil and gas resources, oil companies represent the state

Interview with lawyer Elena Ligia Trocan, member of Bucharest Bar Association since 2004. In the recent years, Elena Ligia Trocan represented several important companies in Banat, providing consultancy and legal assistance in commercial, tax and civil law. In several counties in western Romania there is an absurd and useless war between local representative, on one hand, and, on the other hand, companies that explore oil and gas resources, based on exploration licences ...

ROPEPCA: Romania is a white map in term of petroleum prospecting

Romania's underground is prospected, in terms of hydrocarbon resources, at a rate of only 10%. Even if Romania was the first oil producing country in the world, fields in production are known up to depths of 3,500 meters and beyond this level "the map is white", said Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA). "Romania is explored at a rate of only 10%, it is practically virgin territory. There is room for new...

This article is available only in Romanian .

Stratan (ROPEPCA): Changes to the fiscal framework in the oil sector should apply to new fields only

The new fiscal framework in the oil sector should only apply to new fields, and not to those that are current in exploitation, Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated on Monday in a press conference. "There have been discussions for two years on a new fiscal regime. Everyone hoped we would have something concrete in 2015, now everyone hopes to know in 2016, but the window of time narrows increasingly more....

Oil production continues to fall, imports grow

Romania imported in January this year an amount of 511.800 tonnes of crude oil equivalent (tep), with 19.100 toe (+ 3.9%) higher than those imported in the same period last year, according to the centralized data from the National Statistics Institute (INS). The oil production totaled 302.300 tep, being by 5.13% (-16.100 tep) less than in January 2015. Taking into account the average annual production over the last years (3.9 million tons), Romania’s current reserves of crude oil...

ROPEPCA supports a progressive royalty system

Mr. Stratan, you are the President in Office of ROPEPCA. For a start, please explain how the association was set up, what are its objectives and main activities. Artur Stratan: The Association was set up in 2012 out of the oil industry’s need to strengthen the sector’s image of onshore oil and natural gas exploration and production in Romania. We wanted first of all to strengthen relations with the authorities and with the civil society. At the time the association was set...

Stratan, ROPEPCA:Petroleum royalties for mature fields should be reduced

Investments necessary to redevelop the mature oil and gas fields, to stop the natural decline of hydrocarbon production in Romania, are huge, which is why the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) recommended the Government to reduce royalties for the production extracted from these old fields, the President of the Association, Artur Stratan, stated at the conference Growth Forum - Romania's development strategy and the euro convergence, organized by...

Romania vying for new investments in oil and gas

With the current oil and gas reserves set to be depleted in the coming decades, Romania is looking to attract big oil majors that could unearth new deposits. However, this could prove to be challenging given the tumbling oil prices, which fell below USD 30 per barrel at the start of 2016. Exploring the Black Sea At present, the Ministry of Energy led by Victor Grigorescu is working on a new energy strategy for the 2016-2035 period. The government is looking to...

Oil and gas reserves decline can only be reversed by investment

The decline of hydrocarbon reserves can be reversed by maintaining and increasing the investment level both in new discoveries and in reviving some mature fields mature, but the Romanian state must use intelligently all mechanisms at its disposal to not drive out private investment, said Daniel Apostol, Secretary General of ROPEPCA Petroleum Association while on Realitatea TV. "Oil men and those that work in exploration and exploitation of gas find that there is a decline in reserves....

The whims of the Petrosphere. A first step on a road of uncertainties

This article is available only in Romanian .

This article is currently available only in Romanian .

Romania's current natural gas reserves will deplete within 15-20 years

Romania's current natural gas reserves will deplete within 15-20 years, considering the current production rate, consumption and replacement rate of 80%, according to Romania's draft Energy Strategy published on the website of the Ministry of Energy. "For the average annual production in the last years (around 10.8bcm) and in conditions of a constant annual decline rate of 5% for proved reserves and a reserve replacement rate of 80%, it can be estimated that Romania's current natural gas...

The Energy Strategy of Romania: Romanian oil will be depleted in the next 20 years. Taxation of companies must be "stable"

Romania's current petroleum reserves will be depleted in 20 years, in conditions of constant annual decline of proved reserves and a replacement rate of 5% for crude oil and condensate, according to the first draft of the Energy Strategy of Romania 2016-2020. In order to postpone as much as possible this timeline and to encurage investments for the discovery of new reserves, the state should act primarely from a fiscal point of view, meaning to convert the taxation regime applied to oil...

Ministry of Public Finance wants to complete a draft law on taxation for the petroleum and mining industies by April

The Ministry of Public Finance aims to draft by April 2016 a proposal on the taxation law for the petroleum and mining industry, according to the Legislative Program of the Government for 2016. Whital, by June 2016, a draft law will be finalized on combating tax evasion. The draft legislation will create a unitary legal framework which criminalizes the acts of tax evasion and tax fraud. Finance Minister Anca Dragu stated ever since December that a draft law on royalties would be...

Government wants to update Petroleum and Mining Laws; NAMR’s input asked up to March 15

All the projects for oil and gas exploration are delayed, warns Sorin Gal, General Manager of the National Agency for Mineral Resources, mainly for reasons that could be eliminated by a revision and a harmonization of the relevant legislation. At the Energy Breakfast Club, the official announced that by mid-March, NAMR will present to the Government a new draft for the Petroleum Law and the Mining Law carried out following the consultation with the companies. Regarding the access to the...

State-owned companies give a generous helping hand to Lukoil

After they accused Petrotel Lukoil of bringing a prejudice to Romania of approximately EUR 2bn, state institutions help the Russian company. The operator of the national oil transmission network, CONPET, decreased the tariff paid by Petrotel for imported oil transported to the Teleajen Ploiesti refinery and Oil Terminal, the national operator through which Lukoil carries out foreign trade operations with energy products at the Black Sea, granted without auction to Petrotel Lukoil nearly...

NAMR has prepared 28 packages for Round XI of the concession of new petroleum exploration blocks

NAMR is ready to launch Round XI for the concession of new petroleum exploration blocks announced Sorin Gal, General Manager of the Agency during the Energy Breakfast Club, 17 th February. The decision is now with the government and is dependent on the taxation legislation for oil and gas industry. After numerous postponements, it is a long-awaited auction by the companies in the sector. Round X has been conducted in 2010, when NAMR awarded exploration and exploitation licenses for 20...

OMV Petrom will abandon 350 wells, the company's oil production will drop by 4% in 2016

OMV Petrom's oil production in Romania will drop by approximately 4% in 2016, aster the company decided to abandon approximately 350 wells of a total of 7,500 producing wells, as a result of oil price decline by over 70% in the last year and a half. Under pressure from low oil prices, OMV Petrom decided to abandon the wells that have operating costs higher than the oil price estimated by the company for this year, of USD 40/bbl. After financial analysis, it resulted that a number of...

The Romanian state, the only winner of the collapse in oil prices. OMV Petrom paid over RON 11bn in taxes and charges in 2015

Even if it recorded losses of RON 690mln in 2015, OMV Petrom paid to the state taxes and charges of EUR 2.5bn (RON 11.085bn), especially as a result of the fixed component of the excise duty (and VAT) related, which does not fluctuate depending on oil price evolution. The fixed cost nature of the excise duty is also the cause for which the decrease in fuel prices is limited, approximately RON 2.6 of the price per liter of gasoline or diesel is directed to state's poket. In 2015, OMV...

The effect of cheap oil: The reserve replacement rate falls dramatically, Petrom's keps on reducing the investments in exploration

Romania's hydrocarbon reserves replacement rate fell dramatically in 2015, as a result of low oil prices, which no longer allowed OMV Petrom, the largest oil and gas producer, to maintain the same investment level. "The Group’s three-year average reserve replacement rate decreased to 35% in 2015 (2014: 39%), in Romania it also decreased to 33% (2014: 39%). For the single year 2015, the Group’s rate was 33% (2014: 42%), while the reserve replacement rate in Romania was 25%...

Sorin Gal, NAMR: 2016 may be the first year when we begin to terminate oil agreements

In 2016, the trend is to reduce investments, signalized Sorin Gal, General Director of the National Agency for Mineral Resources (NAMR), while at Energy Breakfast Club of 17th of February, on sustainability in the oil and gas sector subject. “There will be drilled very few wells, the workover activities are halved, the exploration part slowed its engines to near zero,” explained the official from NAMR. There are already lawsuits related to companies that did not respect...

The state increases the oil transmission tariff, from which it already takes USD 2.5/bbl

Operator of the national oil transmission system CONPET posted in 2015 operating income by RON 8mln higher than in 2014, according to information submitted to BSE. CONPET Ploiesti, operator of the oil transmission system by pipelines, had a good year in 2015, despite continuous decline in global oil prices. The preliminary results for last year, made public in the recent days by CONPET through the Bucharest Stock Exchange, indicate that the operator will post in 2015 operating income...

Senator Cotescu interested in changes of the calculation of the royalty for crude oil .

This article is available only in Romanian .

Kinga Daradics MOL: Romania's future depends on investments in four sectors.

This article is available only in Romanian .

The State decides to increase the transportation tariffs for crude oil. Petrom, the main company affected.

Conpet had slightly increased the transportation tariff for oil via pipelines, but, in the context of low oil prices, the cost for transportation has a great impact in the balance sheet of oil companies. The National Agency for Mineral Resources approved the increase in tariffs charged by the national oil transmission company Conpet for the national oil transportation.  According to an order published in the Official Gazette, the new price is RON 79.75/ton.  The increase is...

NAMR states that it is close to opening the bid round promised in 2013 – new petroleum concessions

  The National Agency for Mineral Resources (NAMR) states it is very close to opening a new international bid round for the concession of new petroleum blocks. The latest bidding round was organized  in  2010,  when  30  petroleum concessions were  auctioned,  with  a  total  surface area  of  30,000  square kilometers, in the west of Romania, Dobrogea and in the continental shelf of the Black Sea. Even if this auction...

Oil: War and Prices

This article is avalilable only in Romanian .

Falling oil prices and potential tax changes may put drag on fresh investments

As Romania struggles with falling oil production in mature fields and has to rely more on imports, companies warn that new investments could be put on hold because prices have plummeted in the recent period. The country is able to cover most of its consumption from domestic gas sources, and the country pins its hopes on offshore projects in the Black Sea to enhance its energy security. However, the Dacian Ciolos- led technocratic government is already looking to change the way energy...

Three steps that oil & gas companies should take during the current low oil prices period

Bucharest, 2 February 2016 – As oil and gas executives navigate one of the most volatile periods in the industry’s history, a new report by PwC’s Strategy& looks at three steps that could help deliver a ‘new normal’ within the maelstrom of change anticipated in 2016. While it’s clear that the demise of oil is nowhere in sight, market fundamentals are certainly out of kilter. This is predominately due to continuously low oil prices, significant...

The Ministry of Energy will hire a consultant to process data of the future energy strategy

The Ministry of Energy works on developing the specifications for hiring a consultant that will process data of the future energy strategy of the country, according to a document of the institution. On Wednesday, ministry officials had a first round of discussions on developing the new Energy Strategy 2016-2030, towards 2050, attended by representatives of 32 associations in the sector. According to the minutes of the meeting, Radu Dudau, adviser to the minister and project...

Decrease in oil prices is seen in Romania's budget: NAMR estimates that the state will collect less from royalties this year

Decrease in oil prices on global exchanges is seen directly in Romania's budget: The National Agency for Mineral Resources (NAMR) estimates that the state will collect this year oil and mining royalties of RON 1.16bn - 1.38bn. The amount is lower than in 2014. "For 2016 the estimates on revenues to the budget from oil royalties are RON 1,000-1,200 million, and in terms of mining royalties - RON 160-180 million", NAMR said, answering to Mediafax questions. In the first nine...

The Ministry of Energy started consultations on the new energy strategy

Officials of the Ministry of Energy started consultations on the energy strategy and Wednesday took place the first round of discussions, with 32 associations in the sector, representatives of the ministry stated for AGERPRES. "The meeting was attended by 32 associations and federations in the energy sector, including ACUE - the Association of Energy Utility Companies, the Romanian Energy Center (CRE), Oil and Gas Employers' Federation, the Association of Energy Utility Companies,...

The crisis of oil price plummet is beginning to impact the state treasury

Overall, the taxes gathered from the exploitation of Romania's subsoil resources are declining. The drop in oil price on international markets meant lower incomes to the budget from collecting royalties. All this time taxation of hydrocarbon producers increased. The National Agency for Mineral Resources (NAMR) collected, in the first 9 months of 2015, royalties of 910 million LEI from companies exploiting mineral and hydrocarbon resources in Romania, of which 744 million represent...

Restart for Romania's Energy Strategy with support from CNMR

The Ministry of Energy's staff plans to complete a project sidetracked by the former government officials: Romania's Energy Strategy. Energy Minister Victor Grigorescu hopes that Romania's Energy Strategy will be debated as soon as possible, stating that it requires predictability and political consensus.   "I wish that this debate takes place as soon as possible, getting this issue out of the way."   I believe that this strategy should be backed up by...

How the state decides who wins or loses between two companies whose shareholder it is

Conpet Ploiesti, the operator of the national oil transport system and also a company controlled by the state with a stake of almost 59% through the Ministry of Energy, plans to increase with 1.41%  the regulated tariff charged for the transport of crude oil extracted by OMV Petrom to Petrobrazi refinery. OMV Petrom, in which the Romanian state has a stake of only 20.6%, through the same Ministry of Energy, is opposing this hike. However, The decision is up to the state, through the...

The price of oil is the lowest in 11 years. Romania's oil production is threatened

The international price for oil is approaching the 30 dollars / barrel level, after recent steep declines. This threshold is very important for Romania as it represents the total extraction cost of a Romanian oil barrel; any decline below this level of international prices could render Romanian oil exploitation unprofitable. Brent oil price, the benchmark of the European market, dropped to USD 32.85/barrel on Thursday morning, losing more than 4% in value in a single day....

Conpet extends the contracts with Petrom and Lukoil after NAMR approved a new tariff increase

The operator of the national system for the transmission of oil and petroleum products, Conpet Ploiesti (a state-owned company) signed the extension for next year of transmission contracts with its main clients, OMV Petrom and Petrotel Lukoil, after the National Agency for Mineral Resources (NAMR) had approved a new increase in the regulated transmission tariffs. The 2016 contract with OMV Petrom for the transmission of oil, gasoline & condensate will be worth 286.7mln...

EXCLUSIVE The new taxation for oil and gas: corporate tax of 35%, incentives from 1999 repealed and a 20-year system

The government will apply to producers of oil and gas an additional tax of 35% on the upstream profit (to be called the "oil tax"), with an additional deduction of 15% for new investments, but will cancel the incentives granted in 1999, which currently allow companies not to pay oil and gas tax or exports customs fees. The new system will be gradually applied, first for oil and gas, then for mineral resources, and will be maintained for a period of 20 years -...

Mark Beacom, Black Sea Oil & Gas: Constant threatening to change the fiscal framework is enough to encourage capital flight

More than one year ago Mark Beacom had the amability to answer some questions for energynomics.ro Magazine, which made one of the best articles we had in our eight issues we published up to now. “2014-2015 – Busiest times ever for the offshore exploration in Romania”, he said in August 2014. Here we are now, in October 2015, with no major changes in legislation and regulations, but with some interesting moves in corporate and operational areas. Midia Resources SRL...

Sand Hill Petroleum, an oil and gas company exploring in Transylvania basin, brings more money to the Romanian subsidiary

Supported by the large private equity fund Warburg Pincus, the hydrocarbon exploration and production company Sand Hill Petroleum has recently decided to increase its share capital with the equivalent of USD 350.000 (cash contribution), after in August 2014 the company had decided to increase its share capital by USD 100,000, according to company documents consulted by Energy Report. Sand Hill Petroleum Romania, whose sole shareholder is Sand Hill Petroleum B.V., received in...

Kara Aylward: Romania could be a regional energy hub

Almost three years after his predecessor ended his mission in Bucharest, the new American Ambassador has finally arrived to Romania, this September. Energy was a major focus on H.E. Hans G. Klemm’s first public interventions.  The Deputy Economic Section Chief and Energy Officer at Bucharest US Embassy, Kara Aylward , was kind enough to explore with us what are the main challenges in the Romanian energy industry and to highlight some of the points of interest for the American side...

The Ministry of Finance wants to launch for public debate, in the first quarter of next year, a draft law concerning royalties

The Ministry of Finance wants to launch for public debate, in the first quarter of next year, a draft law concerning royalties, one that would come into force in 2017, Finance Minister Anca Dragu stated on Friday at the general presentation of the 2016 budget within the plenary meeting of the Chambers' Budget-Finances Commisions.  "The drafting of this law is in advanced stages. We want to put it up for public consultation in the first quarter, where it should stay for sufficient...

NAMR wants to assign the concession of 70 exploration blocks and 50 exploitation blocks in 2016

The National Agency for Mineral Resources (NAMR) plans to give for concession, in 2016, 70 new exploration blocks and 50 blocks for the exploitation of mineral resources, according to the draft budget of the Secretariat General of the Government (SGG), institution that coordinates NAMR. At the same time, NAMR wants to negotiate and conclude 10 petroleum agreements and addenda, as well as a number of 82 concession licenses, 920 exploitation permits, 30 mining prospecting permits and 10 oil...

Tough times for the upstream industry: holders of 54 petroleum concession agreements have announced their intention to abandon the projects

2015 has been a very tough year for the oil industry, especially for the upstream segment, which deals with the exploration, development and exploitation of fields in Romania.  The decline by approximately 50% in oil prices was only one of the reasons why uncertainty was established in the market. Excessive bureaucracy, protests of environmentalists and confusion propagated in the media between conventional and non-conventional resources also had a great contribution to the difficult...

MOL – 20 successful years in Romania... and counting

As an old saying goes, every journey starts with the first step. MOL Romania took this step 20 years ago. Now, MOL service stations are well-known by the Romanian and foreign drivers, due to their positioning on all major routes and in cities throughout the country.  There are probably few those who know that the first MOL station was opened in 1995, in Salonta, Bihor County. Back then, Romania was very different from what we see now. At the time, the country was not a member of...

What locals think of the collaboration with Prospectiuni

So far we have presented numerous details on the project regarding the acquisition of geophysical data carried out by Prospectiuni for its client Hunt Oil Company of Romania, but now it's time to learn the opinions of those who have collaborated with Prospectiuni representatives in Vrancea and Bacau counties. "I have a few areas that the people at Prospectiuni crossed over while unfolding their activities, including during the ploughing season. They paid me the compensation we...

Ciolos: We must publicly debate the draft regarding the increase of the royalties level

Prime-Minister Dacian Cioloș believes the discussions regarding the draft to increase the royalties level should be kicked-off by launching a public debate on the subject. "I know the Ministry of Finances is preparing a draft on the royalties law. To my knowledge, it should have already been released for public debate, but it was postponed. We intend to at least launch the public debate on this draft law and, at the same time, crunch some numbers and assess the best time and the...

The contractors in oil industry halved their revenue and reported losses

THE DOMINO EFFECT OF CHEAP OIL by Radu Bostan   Suppliers of products and services for the oil industry are going through the worst year of the crisis since 2008-2009 onwards, with lower incomes at nine months and 60%, because of dwindling investments due to low oil prices. Oil prices to the 2008 lows affected not only oil producers but also related industries that depend on drilling, extraction and exploration contracts. The Bucharest Stock Exchange lists 9 contractors of...

ROMANIA: How the explorers and producers see it

Representatives from explorer and producer companies in Romania recently offered their views on natural gas extraction in the country at Interconnecting Europe: Natural Gas in Romania . Alexandru Maximescu , Director of Corporate Affairs, OMV Petrom , said he agreed with the sentiment, expressed by MEP Norica Nicolai, that Romania's voice is too soft in Brussels. He said, “In this respect, a first, decisive step was done last year when the potential of the Black Sea was...

EXCLUSIVE - The former Government has negotiated with the IMF an additional tax of 35% on oil companies' profits

Ponta Government has negotiated with the International Monetary Fund (IMF) the introduction of a new tax, amounting to 35%, on the profit posted by oil and gas companies exclusively from their upstream activities, according to ministerial sources involved in negotiations, who confirmed information previously published by Profit.ro. According to quoted sources, in negotiations with the IMF, the options taken into account in terms of the rate of the new tax on profit obtained by oil...

Gal (NAMR): The royalty level remains the same in the new law

The level of royalties remains unchanged, and the chapter in the previous law is fully transposed in the new law, stated Sorin Gal, General Director with the National Agency for Mineral Resources. "Regarding royalties, the draft was finalized by the Ministry of Finance. Royalties remained unchanged. I want to stress this out. So, the article 49 of Law 238 was transposed ad litteram in the new law. Also, we came up with certain suggestions which you'll probably notice on the Ministry...

Black Sea - energy resources and economic potential

by Constantin Niţă Energy strategy. Romania, regional energy hub. Diversification of supply sources. Consolidation of energy security. Economic growth. Expansion of energy companies in Romania - Transgaz and Romgaz. Creation of new jobs. During the past three years, I've reiterated all of the above in the context of necessity to adopt an energy strategy, while i've highlighted the importance of gas resources on the continental shelf of the Black Sea. The context is...

Stratan, ROPEPCA: "Difference of pressure in the gas network hinders interconnections"

Romania cannot achieve interconnection with any country for gas transmission, because of the high pressure differences, Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), stated. He explained, quoted by Agerpres: "An important pillar of the European Energy Union is regional integration and interconnectivity. In this regard Romania will have a lot to work, because at the moment we cannot interconnect with neighboring...

Is Romanian crude Brent or Urals? The answer will influence the new royalties

Oil and gas royalty rates will not be changed and the state wants to introduce an additional tax on profit obtained by oil companies from the hydrocarbon extraction activity, ROPEPCA president Artur Stratan stated, confirming the information previously published by Profit.ro, but changing the royalty regime cannot be done until it is determined the crude benchmark whose average global price will be used as reference in the calculation of royalties owed by producers in Romania....

Stratan (ROPEPCA): Only 10% of the area of sedimentary basis is covered by modern 3D seismic technology

Sedimentary basins are covered at a rate of 10% with modern 3D seismic technology, Artur Stratan, President of the Romanian Petroleum Exploration and Production Companies Association, stated during a specialized conference. "Prospectiuni has conducted a study. The figures could shock a bit. The company reached the conclusion that only 10% of the total area of sedimentary basins in Romania is covered with modern technology, i.e. 3D seismic surveys. For 2015, the figure...

Government has lost another year with the law on royalties

The Romanian state wasn't able last year to come up with a coherent project for the taxation of subsoil resources and extended the application of the royalty and additional tax system for this year. Now, the authorities were taken again by surprise, so they will extend by another year the application of the current system. The Government has lost another year in vain regarding the new law on oil and gas royalties, given that the current taxation system will be extended in 2016 and...

Winners and losers in the world oil crisis

This article is only available in Romanian

The new royalty system will enter into force on January 1st 2017. Government negotiates with the IMF the level of hydrocarbon taxes

The current hydrocarbon tax system will be extended by one more year, the new royalties following to enter into force as of January 1st 2017, given that the Executive and the International Monetary Fund (IMF) are still discussing on the project, which will be launched for debate, approved in the Government and sent to the Parliament, which would adopt it by mid- next year, Finance Minister Eugen Teodorovici stated on Thursday. Eugen Teodorovici on Thursday stated that three...

Investments: frozen by the fiscal burden or encouraged by public policies?

by Daniel Apostol In spring we started a number of analyzes prompted by the question "which tax regime is the best?", analyzes that developed in fact the idea that there is no such a thing as "the best" tax system (the same goes for "the worst") applied to the oil and gas industry. However, we have shown that "the most inappropriate" tax regime for any industry and especially for oil and gas is the regime which, instead of supporting economic development through investments, strangles...

The principles for a flexible and stable taxation for the oil industry

For the moment, this article is only available in Romanian.

The challenges of deep offshore exploitation - the Black Sea context

At the moment this article is only available in Romanian.

Observations regarding the royalties and similar taxes

At the moment this article is only available in Romanian

Contributions to the budget shouldn't kill the oil and gas industry

by Artur Stratan The most difficult mission of stakeholders regarding the new tax regime applicable to the oil and gas industry is to negotiate a fair balance for all, so as to allow collections large enough to the state budget and a final price at the pump affordable for citizens. Not least, the state must recognize the importance of this industry and boost the attraction of investments from both foreign and local capital. Oil royalty itself is nothing but a fee charged by the state...

How come the government has money for salary increases, but not for investments?

Romania's reliance on fuel and gas imports has been quite high, until the triggering of the economic crisis, in 2009. Since then, amid a consistent decline in consumption, this reliance also fell, currently being in the case of gas almost inexistent. Apparently paradoxically, with a domestic gas production in a constant decline year after year, Romania manages to ensure its consumption needs exclusively from domestic production, at prices already close to prices on the European...

The oil price of USD 50/barrel makes another victim: the well services market is

The market of oil drilling services, valued this year at approximately EUR 100mln, is "dead", says Radu Mircescu, CEO and shareholder of Gasoil Service, a player with a turnover of RON 11.3mln last year. The decline from a year ago in oil prices to USD 50/barrel, value around which it currently maintains, does not prompt oil companies to invest massively in new wells. However, hydrocarbon producers are forced to allocate money for these activities, at least for repair and...

The secrets of the Romanian chemist who discovered the oil refining process

At the moment this article is only available in Romanian

Petrolum royalties and the state law - or how the Romanian state loses its self-esteem

At the moment this article is only available in Romanian  

British Ambassador: The new oil royalties should maintain the profitability of investments after the collapse of oil prices

Any government is entitled to set its own rules, including in terms of taxation of the exploration and production of hydrocarbons, but the new system for oil royalties prepared by the authorities in Bucharest should ensure that investments in exploration and exploitation of oil and gas resources of profile companies keep their rate of return in the current conditions, of massive decline in global oil prices, British Ambassador to Bucharest Paul Brummell stated. The Ambassador made...

Cheap oil causes thousands of Romanians to lose jobs

Thousands of people out of jobs, fields with rusty wells and blocked investments. That sums up the oil industry in Romania after a year of historical low prices on oil barrel. Also, the fields do not have that many resources anymore, and if the big companies do not resume prospecting activities, the oil reserve might deplete in maximum 10 years. On an oil field just outside the capital, out of 4 wells, 2 are already decommissioned, one is shut down, and the fourth is currently being torn...

Gerea: Oil royalties for offshore areas could decrease, but mining royalties will be increased

Mining royalties will increase, but the oil royalties for offshore areas could decrease, because these activities involve extremely high investments, Energy Minister Andrei Gerea stated. "There are states depending on oil exports and which feel dramatically the decline in oil prices. In Romania, royalties are acceptable, let's say, in the mining segment, here we can discuss about increasing them, I mean in the field of gold and other ores. For the oil and gas industry, we need to...

What taxes should the state collect from oil companies

Experts claim that the state should negotiate with investors the number of jobs and the level of salaries and not focus strictly on taxes and fees. The new hydrocarbon taxation system remains a topic of discussion and increasingly more voices say that it will not be applied as of January 1st 2016. That after, late last year, the Executive extended by 12 months the royalty system which expired in December 2014. In terms of royalties, the opinions are divided. "The last...

Royalties paid by oil companies to the Romanian state fell 35%. How much did companies exploiting Romania's resources pay

The total amounts collected by the state from royalties in H1/2015 fell by RON 50mln compared to last year, result entirely due to oil royalties paid, mostly by Petrom. The decrease in oil prices on international markets brought lower incomes to the budget from royalties. In this entire time, taxation of hydrocarbon producing companies increased. The Romanian state collected, in the first half of this year, RON 576.5mln, royalties paid by companies exploiting subsoil resources of...

Sources: The additional tax on the profit of oil companies came to nothing

The current government does not plan to submit to public debate, by the general elections of next year, the additional tax system for the operating profit achieved by oil companies, according to several political sources. "Companies activating in the field have always advocated for maintaining royalties and it seems to have been successful, after international oil prices collapsed", the sources said. The PNL Group of the Chamber of Deputies organized, on Tuesday evening, a consultation with...

Spataru (NAMR): The last blocks offered did not have the results expected by investors and the Romanian state

The last blocks offered for concession by the National Agency for Mineral Resources (NAMR) did not have the expected results, Mihai Spataru, senior adviser at NAMR, stated on Thursday in an energy conference. "The last exploration blocks offered for concession and on which large scale works have been executed did not have the results expected by the Romanian state or investors. In this respect, it should be seen very clearly what could be the way for the change in royalties to be...

Artur Stratan (ROPEPCA): Negotiations with the state on royalties, delayed by the resignation of Secretary of State Dan Manolescu from the Ministry of Finance

Resignation of Secretary of State Dan Manolescu from the Ministry of Finance was a factor of delay of negotiations between the representatives of the oil and gas industry and state officials on changing the oil royalties system in Romania, the President of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) stated in a profile conference. "Negotiations with the state on royalties will continue, but for now we don't see any time horizon. A factor...

Romania has the biggest production of O&G but no energy companies in top 10

This article is only available in Romanian

Press release - PNL Group of the Chamber of Deputies

PNL Group of the Chamber of Deputies organized on Tuesday, September 29th, a consultation with the representatives of operators in the oil industry of the three profile associations: Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), Romanian Association of Offshore Concessionaires in the Black Sea (ARCOMN), Oil and Gas Employers' Federation (FPPG). Dialogue between the National Liberal Party (PNL) and the organizations mentioned is a long-term one and led to...

Experts in the energy sector will discuss on Thursday about the new Petroleum Law and about the future oil royalties

The best known experts in the energy industry will analyze on Thursday, within the event Sustainable Romania - ENERGY, Romania's need for energy strategy, the new petroleum law, the royalties regime and the general and particular fiscal regime covering the oil and gas industry, as well as the principles of legislation providing sustainability for investment projects in the energy sector. The event will take place on Thursday, October 1st, in Bucharest, at Athenee Palace Hilton Hotel,...

The important law "forgotten" by Ponta Government

Government led by Victor Ponta left dust to settle in the drawer on an important project: the new law on royalties for hydrocarbons, directly addressing energy companies in our country. Late last year, the Executive extended by 12 months the royalty system which expired in December 2014, and Ponta promised to impose a system that would bring "rivers of money" to the budget. At that time, the decision was argued by the fact that "changes cannot be operated overnight". Moreover,...

Where leads the petroleum price?

At the moment, this article is available only in Romanian

Deloitte study: Actual taxation of oil and gas production increased in Romania in the past year, while in Europe it decreased

The actual average tax rate applied to revenues of hydrocarbon producers in Romania increased from 13.9% in late 2013 to 15% in mid-2014, respectively 15.7% in mid-2015, while at European level it fell from 12.2% in late 2013 to 11.7% at the end of last year, according to a study recently conducted by Deloitte, ordered by the Oil and Gas Employers' Federation, which includes the main producer in Romania, OMV Petrom. According to the quoted document, the actual rate of taxation of the...

Royalties could be delayed again. What did the Ministry of Finance promise in spring

The Tax Code, parafiscal charges and royalties are the three large components of the fiscal picture in our country. Among them, royalties should be a priority for the Government. We are approaching the end of September and the draft law on royalties in the oil and gas sector has not been submitted to the Parliament. Moreover, according to government sources, it will not reach the Parliament in the near future. That although, in spring, representatives of the Ministry of Finance guaranteed...

1,5 bn dollars Oil and Gas projects can stall because of the low oil price

This article is only available in Romanian

Taxation in the oil&gas industry increased this year

Romania collected more from royalties and taxes applied to oil and gas producers, but the profile companies still have to wait for the promised changes in the tax system. According to a study conducted by Deloitte at the request of the Oil and Gas Employers' Federation (FPPG) , difference between royalties and similar taxes applied for the oil industry in Romania and the European average was accentuated in the last year. The royalty system applied to hydrocarbon resources in Romania had...

The percentage of tax on oil and gas production increased

This article is only available in Romanian

What could the Government prepare for oil and gas producers

Oil and gas companies could be taxed additionally as of January 1st 2016. The draft of the new law on royalties will be launched for public debate this year Government could impose an additional tax of 30% on profits, besides the 16% rate, to companies in the oil and gas industry, according to sources within the Ministry of Finance, consulted by EVZ. The measure could appear in the draft of the new law on royalties, which is about to be completed and will be submitted for...

How do the small oil companies survive in the shadow of giants OMV and Romgaz

At the shadow of the two giants in the oil and gas industry in Romania, a number of small companies with 1-2 employees and up to hundreds of employees "ransack" the depleted fields seeking profit, as, in the past, adventurers would search in the rivers around gold mines. Small companies living in the shadow of large hydrocarbon producers, Romgaz Medias and OMV Petrom, ask the state to decrease the level of royalties charged for oil and gas production and complain that the "tax...

Oil producers in Romania don’t want to be “Government’s piggy bank”

Oil producers want to pay smaller royalties for oil extraction in Romania, said Artur Stratan, president of the Romanian Petroleum Exploration and Production Companies Association. “We don’t want to be the Government’s budgetary piggy bank anymore,” he added, cited by local Digi24. However, Romania now charges some of the smallest royalties for oil extraction in the world. The oil & gas producers pay the state between 3.5% and 13.5% of the production based...

Oil companies force the decrease in royalties, taking advantage of halving global oil price and depletion of domestic resources

Companies extracting oil and gas are asking for a decrease in royalties, due to the negative effect of oil price decrease and depletion of domestic resources. Also, the profile companies request the elimination of the tax on special constructions and additional taxes on extraction and gas liberalization. The state has been waiting for ten years to be able to increase oil and gas royalties, but now the oil companies are asking for a decrease in royalties and the elimination of the...

ROPEPCA: increasing royalties would be catastrophic for the industry

Artur Stratan (ROPEPCA): The new law on royalties could enter into force on January 1st 2017; increasing royalties would be catastrophic for the industry  "The ideal would be that a change of royalties be introduced as of January 1st of any year, because it is very difficult to change during the year the calculation method and all the book records of a company operating in the oil and gas industry". The new law on royalties could enter into force on...

Transparency in the natural resources sector has to wait one more year

The obligation of oil, gas and mining companies to publish the details of all payments they make to the state budget will be postponed to 2017 write profit.ro. This obligation has appeared in European legislation since 2013 and Romania should have introduced it in 2016. That directive requires companies active in natural resources extraction (oil, gas, mining and logging) to report and publicize, in full, all payments over 100,000 euros made to the state authorities, owners of these...

National budgetary piggy bank and European tax regimes - Part II

Europe applies a lower base for royalties for mature fields and in case of investments in the exploration of technological frontier areas, i.e. where capital expenditure and operating costs are the highest. In the previous edition we published the first part of this article, in which we started presenting how tax regimes in the European Union encourage investments for the exploration of technological frontier areas and investments in the exploitation of mature and marginal oil and gas...

Bloomber Analysis: Oil and Gas industry needs 500 bn dollars to survive

This article is only available in Romanian

National budgetary piggy bank and European tax regimes - Part I

In the European Union, tax regimes encourage investments for the exploration of technological frontier areas and the exploitation of mature and marginal oil and gas fields. Romania's economic growth has so far been based exclusively on increasing the consumption of goods and services. But national prosperity, consequence of sustainable economic growth, cannot be achieved without direct investments, foreign or domestic, it cannot be obtained without the direct stimulation, through economic...

“Fit for fifty” and maybe more than that…?

This article is only available in Romanian

The drop in oil prices shakes the world economy

This article is only available in Romanian

How the state manages to lose investments of millions of euro

This article is only available in Romania

3D seismic prospecting in Adjud area

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The State and the bugetary piggy bank

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Royalties: fair for all parties or death for investments?

Daniel Apostol Soon, the bill regulating the regime of royalties will be completed. A law that should find a reasonable formula of balance between the immediate budgetary needs and long-term geostrategic interests in the energy sector. State's relation with the private economy should be based on a legislative and fiscal system built on several clear principles, easy to understand, apply and observe by both parties. In such an equation, this type of regulatory and taxation...

Government wants to introduce an additional tax for oil companies

The Ministry of Finance is working at the new royalty system which will come into force on January 1st 2016 and wants to introduce an additional tax for part of the oil companies, but also tax reductions in certain conditions. The new modality of hydrocarbon taxation, for which the National Agency for Mineral Resources (NAMR) works together with the Ministry of Public Finance, will be completed in August and will be debated in the Parliament in the autumn session. "The Ministry of...

NAMR: The new royalties will be finalized in August and will be debated in the Parliament in autumn

The new modality of hydrocarbon taxation, for which the National Agency for Mineral Resources (NAMR) works together with the Ministry of Public Finance, will be completed in August and will be debated in the Parliament in the autumn session. "The Ministry of Public Finance manages this activity. There have been several rounds of discussions with the International Monetary Fund (IMF). Some evaluations and simulations have been made, three scenarios are considered. In the immediate period...

NAMR to put up for concession 30 more oil blocks

The National Agency for Mineral Resources (NAMR) will auction 30 oil blocks, for exploration, within the XI Round, the operation following to take place after the approval of the new royalties for hydrocarbons. "We are about to complete the XI exploration round, for petroleum agreements in blocks both onshore and offshore. We also expect to complete the tax law relating to petroleum activities. The round will be launched as soon as the new royalty level is approved. We will put up for...

Gheorghe Duțu: We work with major oil and gas operators to improve the legislative framework

This is the transcript of the message delivered by Gheorghe Duţu, President of the National Agency for Mineral Resources (NAMR), during the Energy Strategy Summit, held on June 4 at the Cantacuzino Palace in Bușteni. Thank you for the invitation and for the scenery which you have provided for the proper conduct of this activity. Any energy strategy is based on the resource potential at its disposal. Currently, the National Agency for Mineral Resources tracks a number of 166 solid...

Elimination of Special Construction Tax could lead to 700 mil. lei in energy profits

Eliminating the special construction tax from the Fiscal Code, effective 2016, will give energy and oil and gas companies over 700 million lei, money spent in 2014, which now can return to shareholders as dividends or could be redirected to investments.

Petrom is preparing to let go of 30 fields

At the moment this article is only available in Romanian.

Andrei Gerea: the Energy Strategy should primarily be drafted with security in mind

At the moment this article is only available in Romanian.

INTERVIEW: Gheorghe Duţu (NAMR): On short term, a spectacular increase in royalties is unlikely

At the moment this article is only available in Romanian.

Who exploits Romania’s riches and how much have they paid for it – The top of royalties paid in 2014

About 80% of royalties collected last year by the Romanian state from companies exploiting Romania’s underground resources come from the hydrocarbon sources. Petrom is the main payer of royalties in Romania, given that it also has almost all oil concessions and splits its gas production with Romgaz. Romania collected in 2014 mining and oil royalties worth RON 1.55bn – about EUR 350mln, up by RON 150mln compared to the previous year, according to information sent to...

Secretary of State Dan Manolescu: “We want to additionally tax the profit from oil exploitation”

The Ministry of Finance will decide this month what system it will propose for additional taxation in oil and gas production, Secretary of State Dan Manolescu stated yesterday in a public debate organized by PNL lawmakers. He clarified, for the first time in the past two years since the Government promises increased royalties, what exactly our authorities plan to tax: “We are talking about a tax system on profit made by companies from the exploitation of oil and gas...

OMV Petrom invested EUR 11.5bn in Romania from 2005 to 2014

OMV Petrom contributed with EUR 19bn to the state budget, and investments amounted to EUR 11.5bn, from 2005 to 2014, Alina Popa, CFO of the company, stated on Thursday during a profile event. “From 2005 to 2014, contributions representing taxes and fees, respectively dividends, to the state budget, stood at EUR 19bn, and investments made – EUR 11.5bn. From our point of view, the most important aspect would be that any system based on income or profit encourages...

With reverence on royalties

It may seem weird that I use the term "reverence" when writing about an industry which is often shunned. But I think that us, Romanians, must learn to show respect and consideration (maybe even veneration - see the dictionary), in other words "pay reverence" to the parts of the economy which generate investments, jobs, incomes, and stable profits, budget contributions, economic growth and national wealth.

Foreign companies in Romania: Amromco Energy plays key role in Romania’s energy future

Amromco Energy is the largest and oldest independent oil and gas producer in Romania. The Company currently operates 30 concessions throughout the country, eleven of which are in joint venture agreement with RomGaz, the largest natural gas producer in Romania. The Company has a strong track record of operating in Romania, this is illustrated by the accomplishment of bringing more fields on-line than any other independent operator over the past 10 years. The Company currently...

UK producers cut back taxes for oil and gas in the North Sea, following the collapse of oil prices

Ministry of Finance in London announced that the main tax imposed on the profits recorded by manufacturers of offshore oil and gas fields in the North Sea will be reduced next year from the current 50% to 35%, in order to support the production of mature O&G fields, on the verge of exhaustion. In addition, the surcharge on profits obtained solely from exploration and production of hydrocarbons will be reduced from the current 30% to 20%. The reduction will be retroactive,...

Royalties and similar taxes applied for oil and gas industry in Romania are above European average

Upon request of the Oil and Gas Employers’ Federation (OGEF), Deloitte performed a study where they analyzed the actual royalties and similar taxes as a percentage of revenues observed in exploration and production of oil and gas (”upstream”) in Europe. Quote OGEF: “During the public talks on fiscal system on Oil & Gas, there were some opinions that the system in Romania should be in-line with European average level. We wanted to see what the level of...

OMV Petrom oil and gas discovery in Buzău County

OMV Petrom, the largest oil and gas producer in Southeastern Europe, in partnership with Hunt Oil Company of Romania (Hunt Oil), announces the discovery of a new oil and gas field in the south of Buzău County. The field was discovered in Perimeter VIII Urziceni Est by drilling the exploration well Padina Nord 1, at a depth of over 2,500 meters. The discovery is located approx. 7 – 12 km away from mature fields, in production for more than 50 years. Estimates from...

INTERVIEW Finance Minister: The current royalty system will be extended by one year; from 2016 we will have a new taxation

The current royalty system for natural resources of Romania will be extended by one year, and from January 1st 2016 a new taxation method will be introduced, Finance Minister Ioana-Maria Petrescu said in an interview with AGERPRES. The new taxation system was prepared together with specialists in the field, after they requested information on the implementation of taxation systems for natural resources in other states, and was discussed with the International Monetary Fund, the MFP...

FSRU Independence a Historic Milestone for Lithuanian Energy Security

Live coverage on the heavily-guarded 294 meter-long floating storage and regasification unit (FSRU) mooring the seaport of Klaipeda, off Lithuania’s Baltic coast, started in the early morning hours with an array of congratulatory speeches from high-ranking Lithuanian, Latvian and Norwegian government officials along with other notable figures that stretched well into the late afternoon. The buzz leading up to the arrival and introduction of the FSRU’s long-awaited...

Panfora Oil & Gas proves in practices that operations for oil and gas exploration and production may coexist with the agricultural activities

Panfora Oil & Gas continues the information campaign, in order to consolidate its relationship with the communities in Arad County, in the localities part of the Ex-6 block, so it has started to notify landowners about its operations, according to the provisions of the Petroleum Law. Panfora Oil & Gas understands the concerns of communities on all aspects involved by oil operations. Therefore, the company proved to be ready to demonstrate the impeccable technological...

Serinus Energy Inc. Romania: Drilling Program Update

Serinus Energy Inc. (“Serinus”, “SEN” or the “Company”) (SEN.TO)(SEN.TO), is pleased to provide the following update on its upcoming two well drilling program in the Satu Mare licence in northwest Romania. The Company has entered into a contract with Tacrom Drilling SRL, which will provide its Rig #3 for the program. The first well, Moftinu-1001, is expected to spud on or about November 8th, pending the rig’s release from its current job....

The Chamber of Deputies adopted the project amending the Energy and Gas Law and the Petroleum Law

The Chamber of Deputies on Wednesday adopted the project amending the Energy and Gas Law and the Petroleum Law, Minister Razvan Nicolescu showing that the gas price liberalization schedule for the population is postponed by at least two years, from 2018 to 2021. There were 241 votes “for”, one vote “against” and 95 abstentions, according to Mediafax. Minister for Energy Razvan Nicolescu said this project aimed at transposing the European Directives to...

The biggest problem of the business environment: the tax on special constructions

One of the biggest problems for Romanian entrepreneurs is the tax on special constructions, Gabriel Sincu, executive director EY Romania, stated for WALL STREET 360, who characterized this tax as an “administrative madness”. PM Victor Ponta announced in early September that the tax on special constructions, known as the “pole tax”, would be reduced from 1.5% to 1% and amounts collected from these taxes wouldn’t enter the state budget, but would remain...

Rompetrol received a permit to explore a hydrocarbon block. The Environmental Protection Agency gives assurances that it’s not about shale gas

The Rompetrol Group received an environmental permit to explore an area of 1,600 meters in the commune of Moftin, Satu Mare County, after tests made in 2012 in partnership with Canada’s Winstar indicated the presence of hydrocarbon accumulations. The Environmental Protection Agency gave assurances that it wasn’t about shale gas. The Rompetrol Group this month received the environmental permit to execute exploration activities in the commune of Moftin, Satu Mare County,...

Gas producer Raffles: investments of RON 97mln in Romania

The fifth largest gas producer in Romania, Singapore’s Raffles Energy, have under concession in Romania blocks such as that of over 2,400sq km in Suceava, in partnership with Zeta Petroleum, a block in Putna region and another one in the village of Lilieci, the commune of Hemeiusi (Bacau County), part of Brodina concession. A month ago, the sole shareholder Raffles Energy Netherlands BV decided to increase the share capital of Raffles Energy SRL by RON 96.9mln by turning...

HotNews.ro analysis: Why the Government avoids putting the bill on the new oil royalties for public debate

The new oil royalties will be calculated and brought to the European average. This was the promise of Victor Ponta in May 2012, shortly after becoming Prime Minister. The promise has been repeatedly resumed. Ponta also said that negotiations would be carried out with the large oil companies, so that the new royalties be applied earlier than December 2014, when the current ones expire. Nothing of what Ponta said about royalties was implemented. Moreover, the Government would want to...

Money from the tax on special constructions to initially go to the budget

Money from the tax on special constructions, which will be reduced from 1.5% to 1%, will be distributed to municipalities, but the tax will be collected to the state budget and the transfer mechanism to the local budgets will be set subsequently, Finance Minister Ioana Petrescu stated. The Government, through the Ministry of Public Finance, supports the reduction of the tax on special constructions from 1.5% to 1%, Ioana Petrescu said during debates at the Committee for economic...

PM Ponta: True battle against Russia involves energy, not conventional weapons

Romania has to consolidate its energy security, as ‘the true battle against Russia will be fought with energy, not with conventional weapons,’ Prime Minister Victor Ponta said on Monday. ‘There is an economic field where Romania took huge steps, and where it has to make further ones; where the support of American companies is strong. It’s the energy industry. We have growth in agriculture; we have growth in industrial production; we have growth in exports. All...

Delaying the amendments to the Energy Law costs us EUR 30,000 per day

Our country will be affected by a new infringement procedure triggered by the European Commission and risks penalties of EUR 30,000 per day, because we failed to transpose properly and in due time the European energy legislation, because the Senate did not debate yesterday the amendments to the Energy Law and the supplementation of the Petroleum Law . Lawmakers of the parties in power point the finger at the opposition, which would be to blame for this situation, because it had...

Rompetrol: Strategia energetica trebuie corelata cu cea fiscala. Nu trebuie omorat calul care trage

Rompetrol a investit 4 miliarde de dolari in ultimii 7 ani in extinderea si modernizarea rafinariei Petromidia isi propune investitii de inca un miliard de dolari in urmatorii 7 ani, fiind identificate deja proiecte de 350 de milioane de dolari in realizarea unei centrale pe cogenerare si extinderea retelei de benzinarii, a declarat Bogdan Oslobeanu, general manager pe proiecte de energie in cadrul KMG International, fostul Rompetrol Group. “Pe langa acestea am putea avea...

Five state inspections at the shale gas exploration in Pungesti, last month

Sorry, this entry is only available in RO.

Tom Holst, country manager Chevron: Operations at Pungesti will be resumed “when we decide that the safety conditions are in place”

Tom Holst, Chevron country manager for Romania stated, in an interview for HotNews.ro that operations at Pungesti (Vaslui County) will be resumed after consultations with the Government and “when we decide that safety conditions are in place”, but avoided mentioning a concrete deadline. Tom Holst also said that the hydraulic fracturing technique might be used in the last stage of exploration works, but the Company would require further endorsements for it. Holst stated...

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