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Offshore law promulgated by President Iohannis

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On Thursday, President Klaus Iohannis promulgated the Offshore Law  which established conditions in which gas exploitations will be carried out in the Black Sea, the Presidential Administration informs.

On October 24, the Chamber of Deputies voted the offshore law. Investors must make transactions with 50% of gas on the stock exchange in Romania and 25% of employees must be Romanian.

Deputies adopted a PNL amendment to the offshore law, according to which the owners of oil accords are applied the fiscal regime applicable to exploration, development and abandoning activities carried out according to existing accords.

The owners of oil accords referring to offshore oil areas must have at least 25% of employees Romanian citizens with fiscal residence in Romania.

Also, the owners of oil accords and their branches, and/or belonging to the same economic interest group which carries out both natural gas extraction and sale activities in those areas must declare and pay the tax on additional offshore activities.

“Additional income is the difference between the average price of natural gas sold from domestic production in offshore areas and the purchase price of natural gas from domestic production for household and non household customers in 2012, that is 45.71 lei/MWh, multiplied by gas volumes sold from domestic production in offshore area,” says the law.

Another provision refers to the fact that oil accord owners in offshore areas must conclude contracts for natural gas sales  in markets in a transparent, public and non-discriminatory way, according to regulations issued by ANRE, for the sale of a minimum quantity of natural gas which cannot be smaller that 50% of the gas production in the respective year.

The initial duration of the concession can be up to 30 years, with extension possibility by 15 years by government decision, upon the request of oil accord owner for offshore areas.

The joint commissions of industries, public administration and budget in the Chamber of Deputies admitted the amendment to the offshore law, so that the protection area in case of archaeological finds was reduced from 200 m to 50 m.

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