Romania adopts new offshore gas law to encourage investment

Blck Sea Oil & Gas, LinkedIn
Black Sea Oil & Gas, LinkedIn

Romanian lawmakers have approved legislation aimed at unlocking sizeable oil and gas projects in the Black Sea, helping the country move toward energy independence.

Black Sea

The development comes as Europe grapples with an energy crisis amid the war in Ukraine, and analysts say Romanian Black Sea gas could diversify gas supplies in the region and bring billions of euros in revenue.

The bill was backed by 249-34 on Wednesday and followed approval from the Senate on May 12.

„With the start of investments in the Black Sea, Romania will become energy independent, we will produce more natural gas than we consume, and the surplus will be able to be delivered abroad and Romania can become a regional energy security provider,” Energy Minister Virgil Popescu said after the vote in a social media post.

Prime Minister Nicolae Ciuca predicted the Romania would achieve energy independence within five years.

Energy

„We are confident that in no more than five years we will be able to become truly independent in terms of energy,” the prime minister said in comments made at the  Romanian Business Leaders’ Summit 2022.

Following the Senate vote, the amendments were expanded to allow the government to impose temporary restrictions on the price and the sale of domestic natural gas production.

The new legislation gives Romania around 60% of the income generated by offshore gas projects with the remaining 40% of the income going to investors including oil and gas group OMV Petrom and gas producer Romgaz which will partner-up in the offshore gas project Neptun Deep.

Export restrictions

It also removes export restrictions for the gas and states the tax regime will not change for the duration of the projects , seen as a guarantee of stability for investors.

However, a last-minute amendment allows the government to enforce temporary price caps and sale restrictions to cover emergency household and heating gas needs.

The energy minister insisted the law brought “stability and predictability, a tax-friendly regime… Moreover, it protects Romania’s national interests, so that in case of energy crisis we can intervene and redirect gas to domestic consumption.”

Natural gas producer

The Midia Gas Development Project is scheduled to be operational next month with an annual delivery capacity of one billion cubic meters.

The prime minister said OMV Petrom and natural gas producer Romgaz are scheduled to complete their natural gas exploration and production projects in the Black Sea by the beginning of 2027.

Romania imports about 15 percent of its gas from Russia.

Romania’s Liberals call for radical party to be sanctioned after altercation erupts in parliament over offshore law

 

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