Since 2014, oil royalty, "as Arab countries"

Romanian President Traian Basescu said in a broadcast on public television, that the fee for oil will be renegotiated in 2014 and be at a similar level to the one seen in the Gulf countries.

Asked what he could do after he expressed publicly dissatisfaction with the pricing policy of Petrom, Traian Basescu said, "What I expect, and I think the time is right, the year 2014, the fee must be renegotiated . And then Petrom should expect that the royalties in Romania will not be less than the ones seen in Arab states ".

The President also reminded that oil companies had been fined with 300 millions.

"Competition Council has already issued a fine of 300 million against oil companies in Romania. Otherwise, you can’t do anything but read and apply the contract signed during the Nastase government , "he pointed out.

Asked whether all royalties should be reanalyzed, not just the royalty paid by Petrom, the Head of State answered that royalties should no longer be used as state budget revenues but should be placed into a development fund.

"You should know that I have ideas regarding royalties. For example, I would not leave them for consumption , as incomes in the state budget. I would make a development fund, as has Norway, as Arab states.

"Royalties are paid into a fund, which is fund development, fund investments, fund of …. and ... for us, springs into attention, the issue of Petrom’s royalty , which is meager, very small, extremely incorrectly negotiated, but you should know the situation is similar in the case of royalties for gravel, mineral waters and many others. So, there must be a political royalty in my opinion", he added.

President Traian Basescu announced recently that he had cut all ties with Petrom as a protest sign against the excess profit it had registered during the crisis, adding that the company’s policy is "incorrect".

"I'm the one that has cut all ties with Petrom as a protest against that the excess profit that the company registered at a time of crisis", the president stated.

Traian Basescu added that he had numerous discussions on this issue with the Petrom, but also with Austrian President.

"The answer was to see, to try to talk, but their practical reality is that do not care", said the President.

"You can not ask a company to be 100% moral, but you can not throw me in the face every day: the world price of oil is $ 120 a barrel , when you extract it from Romania to $ 16. Here it seems to be Petrom's lack of fair play ", the president said.

Asked if the contract can be modified , he said: "No, unfortunately the contract is written such that you can not do anything".

Group companies registered record profits last year increased by 72 per cent to 3,759 billion lei (887 million), the largest gain ever recorded by a company in Romania, and record sales of 22,61 billion lei (5,3billion).

Royalty - Amount of money paid regularly by companies for the right to use another's property for productive purposes.


Translated by
Denisse-Meda Bucura
MTTLC, Bucharest University