The Romanian President has signed the new offshore law, which establishes a new regulatory and fiscal framework for offshore gas exploration and production operations in the Black Sea. It was approved by the Chamber of Deputies in October 2018 after several months of review, which lasted longer than expected on concerns that its provisions could endanger investments in the Black Sea.
The new offshore hydrocarbons legal framework sets taxes and royalties levels, gross production thresholds and sales on the wholesale market. The current level of royalties, taxes and gross production thresholds will still apply to the holders of current offshore petroleum agreements, namely OMV Petrom and ExxonMobil. Companies active in offshore production will have to sell at least 50% of their annual gas production on the centralised market in a "transparent, public and non-discriminatory way".
The new changes reduce the possibility of oil and gas companies to deduce their investment when paying taxes. The law maintains the limit of 30% of investment allowed to deduce when paying taxes. This is disapproved by several investors, which believe that it makes it more difficult to make final investment decisions (FIDs) and may discourage future investments.
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