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Controversial 'Offshore law’ was adopted despite Oil companies reaction

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The Chamber of Deputies adopted on Monday, as the decision-making body, the draft bill establishing measures for the exploitation of Black Sea energy resources, with 175 votes in favour, 30 against and 30 abstentions.

The bill sets out measures necessary for carrying out petroleum exploration, development, exploitation and abandonment of oil exploration operations as well as oil exploration works/ oil rigs carried out by petroleum agreement holders on offshore oil blocks, in accordance with the provisions of the oil agreements concluded between the holders and the National Agency for Mineral Resources (ANRM).

Chamber of Deputies Speaker, Liviu Dragnea, said on Monday, after the vote, that we cannot accept that our country remains energetically dependent on Russia.

“It is a very important law and I hope that the abstentions or votes against were generated not by bad faith but by failing to understand the law’s provisions,” PSD leader Liviu Dragnea told the chamber’s plenary.

He argued that he has consulted the colleagues in the Chamber of Deputies and decided that the law should not be adopted in the form voted by the Senate.

“We had to adopt this law not in the form of the Senate, I do not want to accuse anyone, it was superficial or it was not carried out a very careful analysis, but I could not accept in the Chamber of Deputies that Romania remains energy dependent on Russia, the fact that we have agreed that 50% of all production to be sold on bilateral contracts, and 50% to be traded on the Romanian market, means that Romania becomes one of the few countries in the world that becomes energy independent. Also, zero over-taxation could not be accepted because the Romanian state cannot remain collecting absolutely nothing,” Dragnea added after the final vote.

Also, another amendment made by the committee and adopted by the Chamber of Deputies refers to the amounts to be collected from royalties and additional taxes, which will feed the special fund set up by the ordinance on public-private partnership.

The specialized committees also gave a positive opinion on the bill on Monday.

The PMP MPs voted against the bill. USR deputies announced before the final vote that they would refrain from voting.

Oil companies, reluctant to the changes

Mark Beacom, Chief Executive Officer of Black Sea Oil & Gas, said, according to digi24.ro, that the words pronounced on Monday have never been heard before. We received constant and firm assurance from successive Governments. Now we find out that the assurances were violated by a series of new provisions that may lead to new blockage on the projects.

In turn, Richard Tasker, Director General ExxonMobil Exploration and Production Romania Ltd, said that the debates on Monday will make even more difficult for investors to decide on carrying on investments.

CEO OMV Petrom, Cristina Verchere, said that the decisions made on Monday in Parliament make us drive away from a final decision favourable to investments.

Among the companies operating in the Black Sea are OMV Petrom, ExxonMobil, Lukoil, Romgaz and Black Sea Oil and Gas. Seven interconnected rigs extract gas and oil from the offshore blocks. 7% of Romania’s oil production, and 13% of natural gas come from the Black Sea rigs.

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Wednesday, July 11, 2018