Romania’s Chamber of Deputies (lower house of Parliament) on July 9 approved the amended draft of a law on the taxation of offshore oil and gas production. The legislation was initially amended and approved by the Senate on February 12. It still requires the president’s signature before its measures will enter into force. Under the new version, a progressive surtax levied at rates ranging from 15 percent to 50 percent, depending on sales price, would apply to the additional income derived by offshore operators from their sales of natural gas produced within offshore perimeters. The proposed tax rates are:
30 percent of the additional income for prices up to RON 85 (about $21.27) per megawatt hour (Mwh), plus
15 percent for extra revenue from amounts between RON 85 and RON 100 per Mwh, inclusive, plus
20 percent for extra revenue from amounts between RON 100 and RON 115 per Mwh, inclusive, plus
25 percent for extra revenue from amounts between Ron 115 and Ron 130 per Mwh inclusive, plus
30 percent for extra revenue from amounts between RON 130 and RON 145 per Mwh, inclusive, plus
35 percent for extra revenue from amounts between RON 145 and RON 160 per Mwh, inclusive, plus
40 percent for extra revenue from amounts between RON 160 and RON 175 per Mwh, inclusive, plus
45 percent for extra revenue from amounts between RON 175 and RON 190 per Mwh, inclusive, plus
50 percent for extra revenue from amounts exceeding RON 190 per Mwh.
Investments in the upstream segment would be deductible subject to a cap of 60 percent of the total value of the additional income.
The surtax would be concurrent with the royalty already levied on the production value at rates ranging from 3 percent to 13.5 percent.
The new law would also require offshore producers to sell at least 50 percent of their total Black Sea gas production on the domestic market.
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