Ascultă Radio România Actualitaţi Live

Romanian Offshore Law on Black Sea. Provisions

Progressive windfall tax, Stabilization, Sourcing requirements, Increased turnover fine, Construction authorization, Labor regime.

Romanian Offshore Law on Black Sea. Provisions

Articol de Nicoleta Turcu, 29 Decembrie 2018, 23:35

Romanian Offshore Law on the Black Sea, sets conditions for exploitation of Black Sea natural gas reserves, hasn’t yet brought new investors in the field. Some say the law, which came into force recently, came too late, while others are not convinced that the provisions will support their investments. Law regulates offshore oil & gas projects in the Romanian waters of the Black Sea, and makes significant changes to existing laws on protective provisions for archaeological sites, historically protected areas and coastal areas.

Some of the most important provisions:

Progressive windfall tax

Aside royalties of 3.5% to 13% of the production value, offshore concession holders will pay a progressive windfall tax on additional revenues generated from the sale of offshore gas, ranging from to 15% to 70% depending on the gas price (i.e. the higher the sale price, the higher the percentage). Additional revenue is calculated as the difference between the average weighted offshore gas price, which shall not be lower than the reference price set by the National Agency for Mineral Resources, and RON 45.71/MWH, representing the 2012 regulated acquisition gas price, multiplied by the volumes sold. Value of investments in the upstream segment will be deducted from the windfall tax up to 30%, but will be "non-deductible" for profit tax purposes. Funds collected from the windfall tax will be dedicated to investments in the gas distribution and transmission network, as well as other government investments.

Stabilization

Stabilization takes the form of a "freezing" clause, providing that titleholders of ongoing offshore concessions benefit throughout the lifespan of the concession from the royalty regime set out by the Law.

Sourcing requirements

Concession holders will procure goods and services from Romanian or other EU economic operators at similar technical and financial conditions. At least 25% of the average annual headcount involved in the offshore operations will be Romanian citizens with local Romanian fiscal residency. These restrictions apply not only to offshore investors, but also to their contractors and subcontractors involved in the design, execution and operation of the offshore facilities.

Increased turnover fine

Like onshore producers, offshore producers are obliged to sell at least 50% of their production on a centralized market (i.e. on OPCOM – the Romanian power exchange, and the Romanian Commodities Exchange) and in a transparent, public and non-discriminatory manner. Failure to comply with this obligation will trigger a turnover fine amounting to 10% of the turnover during the year when the breach is acknowledged.

Construction authorization

Construction works and well drilling are subject to special authorization by the Ministry of Energy and the National Agency for Mineral Resources. Special derogatory rules are set out for zoning and for historical monuments and archaeological sites. Offshore concession holders enjoy a statutory right of passage over public property for the full life of the offshore operations, in exchange for a consideration determined by an independent valuator and subject to authorization by the Ministry of Energy.

Labor regime

Derogatory rules are laid down with respect to the working schedule of the employees and the level of the overtime bonus.

Source: RRA, Romanian Lawyers Week

Etichete : legea offshore
The reforestation program is available until January 2026
News in English 30 Iunie 2025, 16:40

The reforestation program is available until January 2026

The reforestation program, open until January next year, helps landowners combat desertification and soil aridification,...

The reforestation program is available until January 2026
Trade unions ask President Nicusor Dan to mediate a possible social conflict
News in English 30 Iunie 2025, 16:38

Trade unions ask President Nicusor Dan to mediate a possible social conflict

All trade union confederations are calling for an emergency meeting on Monday between their leaders and Prime Minister Ilie...

Trade unions ask President Nicusor Dan to mediate a possible social conflict
170 passengers have been stuck on a plane at Sibiu International Airport for several hours
News in English 30 Iunie 2025, 16:37

170 passengers have been stuck on a plane at Sibiu International Airport for several hours

170 passengers have been waiting for several hours on a plane at Sibiu International Airport after the crew decided to turn...

170 passengers have been stuck on a plane at Sibiu International Airport for several hours
The government will announce austerity measures
News in English 29 Iunie 2025, 13:54

The government will announce austerity measures

Next week, the government will announce a package of measures to reduce the budget deficit and improve access to European...

The government will announce austerity measures
Romania and France reconfirm strategic partnership
News in English 29 Iunie 2025, 13:53

Romania and France reconfirm strategic partnership

During a telephone conversation on Friday, Romanian Foreign Minister Oana Toiu and French Foreign Minister Jean-Noel Barot...

Romania and France reconfirm strategic partnership
General Assembly of Judges and Prosecutors convened on Monday
News in English 28 Iunie 2025, 13:38

General Assembly of Judges and Prosecutors convened on Monday

The judges and prosecutors sections of the Superior Council of Magistracy (CSM) decided on Monday to convene the General...

General Assembly of Judges and Prosecutors convened on Monday
Meeting of the National Council of the National Liberal Party
News in English 28 Iunie 2025, 13:37

Meeting of the National Council of the National Liberal Party

The National Council of PNL is meeting on Saturday to vote on a new statute that will allow liberals to bring new people into...

Meeting of the National Council of the National Liberal Party
The budget deficit reached 3.39% of GDP after the first five months of 2025
News in English 28 Iunie 2025, 13:35

The budget deficit reached 3.39% of GDP after the first five months of 2025

The budget deficit reached 3.39% of Gross Domestic Product after the first five months of the year, compared to 3.41% in the...

The budget deficit reached 3.39% of GDP after the first five months of 2025