OMV Petrom welcomes changes to Romanian offshore gas law

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VIENNA, April 20 (Reuters)Romanian OMV Petrom ROSNP.BX on Wednesday hailed changes to an offshore gasoline tax law tabled by the government in Bucharest last week as an “indispensable” step for the development of Black Sea gas.

Gas producers spent 15 years and billions of dollars preparing to exploit Romania’s roughly 200 billion cubic meters of gas in the Black Sea, only to delay or suspend their projects four years ago when a tax additional has been introduced.

If the changes to the Offshore Bill are approved in Parliament, the current tax will be reduced.

Changes to the legislation include a reduced progressive tax linked to gas sales prices. The new tax bill also stipulates that the tax regime will not change for the duration of the projects, providing a necessary guarantee of stability for investors.

The bill also removes restrictions on the export of gas, except in emergencies.

“The publication of a draft offshore law is a long-awaited and indispensable step to ensure the necessary conditions for the development of Black Sea gas,” OMV Petrom told Reuters.

“It is important that the law provides a strong stability clause, guarantees a free market and provides a competitive fiscal and regulatory framework,” he added.

OMV Petrom, majority controlled by the Austrian OMV OMVV.VI discovered 1.5 to 3 trillion cubic feet of gas in the Black Sea which it planned to jointly extract with Exxon Mobil XOM.N until leaving the company. Romgaz acquires Exxon’s stake.

Petrom is expected to make a final investment decision next year.

Romania’s oil and gas employers’ association also welcomed the bill on Wednesday, saying it was assessing the impact of the proposed amendments.

“Unlocking these legislative changes is essential not only for Romania’s energy security, but also for regional security, especially in the new context of sanctions against Russia,” he said in a statement.

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(Reporting by Alexandra Schwarz-Goerlich; Additional reporting by Luiza Ilie; Writing by Miranda Murray; Editing by Jane Merriman)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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