The Romanian Chamber of Deputies endorsed the amendments to the Offshore Law that were expected for years to unlock the several gas investment projects in the Black Sea.
Minister of Energy Virgil Popescu said that, with this amended law, gas production can basically begin in the Black Sea, adding that new legislation brings stability, predictability, and a friendly fiscal system.
However, it remains to be seen whether the new legislation, which lowers the tax and removes export restrictions on gas, is enough to convince investors to go ahead with their plans. Black Sea Oil & Gas (BSOG) already criticized the proposed amendments.
The amendments stipulate that the Romanian state will have preemption rights and will receive around 60 % of the income generated by offshore gas projects. The remaining 40 % of the income will go to investors. The draft bill also states the taxation regime will not change for the duration of offshore gas projects and introduces a smaller tax on gas sales. Also, it removes export restrictions for natural gas, except in emergency situations.
The production at Midia gas project in the Black Sea, operated by BSOG, is expected to commence in the second half of the year, while the investors in Neptun Deep project (OMV Petrom and Romgaz) are expected to reach final investment decision in early 2023. The least advanced is the Trident gas project, operated by Romgaz and Lukoil (in 2020, Lukoil said that it plans to withdraw from the project).
According to estimates of the National Agency for Mineral Resources (ANRM), potential gas reserves in the Romanian Black Sea amount to 200 billion cubic meters of gas, enough to cover Romania’s domestic consumption for 19 years.
