Last week the Romanian government approved the bill applicable to Black Sea offshore petroleum concessions.
The bill separately regulates offshore concessions and operations and derogates from the existing regime on matters related to offshore investments and fiscal stability.
Notable changes include:
- The bill does not distinguish between on-shore and off-shore royalty levels (currently between 3.5% and 13%). Offshore titleholders however, will be exempt from paying the 60% windfall tax on incomes obtained from the de-regulation of gas prices and from the special gas exploitation tax.
- The bill forbids construction within the safety area of the pipelines and allows offshore companies to perform works on the coastal area year-round.
- Offshore works will require authorisation by the Minister of Energy and nine other authorities, including Environment Protection, Water Management, Army General Staff, Border Police, Foreign Affairs, and the new Offshore Regulatory Authority. Well drilling will be subject to special authorisation from the National Agency of Mineral Resources.
The bill requires at least 25% of offshore titleholders’ employees to be Romanian. It also derogates from the applies Labour Code regulations, such as if employees work for one month then they are entitled to one month’s rest, and 12 hour shifts limits.
The bill also imposes a minimum acquisition ratio of 25% of products and services from local Romanian persons.