Romania ponders accepting in-kind royalties from oil and gas companies

Romania’s Government considers amending the Oil and Gas Law so as to accept in-kind royalties from oil and gas companies for the concession contracts, at least for the offshore perimeters, unofficial sources told Profit.ro.

The state could use the natural gas thus obtained for supplying vulnerable consumers or state-owned heating and electricity plants (CETs), Profit.ro assumes.

However, it’s not yet clear whether this is a serious intention, a new negotiation strategy with the companies in the sector or just a working scenario. It is also unclear whether the Government considers returning to the production sharing system, in place until 1995, or to an intermediary system of in-kind royalties, a system that applied after the adoption of the former oil law (134/1995) until the entry into force of the current oil law (238/2004).

According to the current oil law, the royalty is paid in money, and calculated as a percentage of the value of the gross output extracted calculated based on the benchmark prices as set by the relevant authority (mineral resources agency ANRM).

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