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Offshore drilling bill clears Chamber of Deputies
The Chamber of Deputies' plenary adopted on Wednesday the offshore drilling bill by a vote of 170 to 3 and one abstention.
"The tax on additional offshore revenues shall be calculated by applying one or several rates to the additional revenues derived from the sale of natural gas extracted from offshore blocks, as determined in accordance with Annex No. 2 that is an integral part of this law; the value of upstream investments is deducted from the tax. The tax on additional offshore revenues takes into account the reference price set by the National Mineral Resources Authority (ANRM) for the calculation of royalties. Transactions below the reference price shall be taxed at the reference price. The tax rates shall be calculated based on the gas sales prices practised by the holders of offshore oil licenses, on the basis of the price grid adjusted annually, with effect from January 1, 2019, with the annual consumer price index as follows: 30 percent of the additional revenues for prices up to 85 lei/MWh inclusively; 15 percent of the additional revenues obtained from prices higher than 85 lei/Wh and less than or equal to 100 lei/MWh; 30 percent of the additional revenues obtained from prices higher than 100 lei/MWh and less than or equal to 115 lei/Wh," the bill states.
According to the piece of legislation, the maximum limit for deducting investments in the upstream segment may not exceed 30 percent of the total tax on additional offshore revenues.
The amounts due by the holders of offshore oil block licenses in tax on additional revenues are collected in a special account used to finance and expand gas distribution networks and connections to the national gas transmission system, as well as to finance other investments established under Government decision, the bill also provides.
The deputies also adopted an amendment tabled by the National Liberal Party to the draft offshore drilling law, according to which the holders of ongoing petroleum sharing agreements are subject to the specific tax regime for exploration, development, exploitation and abandonment activities carried out under the existing agreements at the date the regulatory act comes in effect.
The Chamber of Deputies is the decision-making body for this bill.