On 28 July 2016, the “Law on the Safety of Offshore Oil Operations” (the “Offshore Law”) was published in the Official Gazette. The Law establishes the minimum requirements necessary to prevent major offshore related accidents and limit their consequences.
The Offshore Law creates a new regulatory authority - the Competent Regulatory Authority for the Black Sea Oil Offshore Operations (“the Competent Authority”) - a specialized body functioning under the Romanian Government, funded mainly from the state budget. The Competent Authority received important prerogatives which will influence the operations, their planning and financing.
The Competent Authority may prohibit operations at any installation if the measures proposed by the titleholders/operators in their mandatory reports on potential damages or accident remediation are considered not to comply with the legal requirements. Also, in the case of noncompliance with the Offshore Law, the Competent Authority may demand upgrades of the installations and, if necessary, may even decide to cease the use of exploiting installations which are not considered safe for operations.
In cases of non-compliance, the Competent Authority may also impose fines ranging from EUR 10,000 to EUR 55,000. In addition, non-compliance with the Offshore Law is considered a minor offence sanctionable with an additional fine.
Contrary to the Petroleum Law, the Offshore Law provides mandatory conditions precedent that must be met prior to the entering into force of petroleum agreements, including required elaboration by the operators of internal plans for intervention in case of emergency.
Moreover, the requirements for becoming a titleholder expressly reference evaluation criteria such as the cost of degradation of maritime environment, financial guarantee for covering the liability for damage which may result from oil offshore operations, including the liability for potential economic damage.
Financial implications are expected to arise out of the legal obligations imposed on operators to implement independent verification systems to ensure that installations are functioning properly and to implement a major accident prevention policy. Furthermore, the Offshore Law establishes the financial liability of the titleholder in cases of environmental damage caused by the titleholder himself, the operator or by the entity acting in their behalf (possibly contractors of the titleholder or operator).
A special provision regards the taxation of offshore operations by referencing a legal mandatory regime separately regulated than from onshore fields, however such new taxation regime has not been made available yet for public consultations.