RO lawmakers to begin debates on revised Offshore Law after May 11
The draft revised Offshore Law was already endorsed by the Legislative Council, and interested parties may come up with amendments by May 11, energy minister Virgil Popescu announced. Afterwards, it will be discussed in the Parliament's expert commission.
Asked about Black Sea Oil & Gas's dissatisfaction with the bill, the minister expressed his conviction that the American company [that operates Midia perimeter in Romania's Black Sea] will extract gas from the Black Sea in the second half of the year.
"I am convinced that we will extract gas from the Black Sea, that Black Sea Oil & Gas will extract gas from the Black Sea in the second half of this year. I am convinced that after July 1, they will let us know the exact date when the production begins. Input tests are already being carried out [for the injection of gas] in the national natural gas transmission system," Virgil Popescu said, quoted by Bursa.
Regarding the share of investments that can be deducted by the oil companies, the minister of energy stressed that he respects the right of each company or employer association to try to earn as much as possible, but "they must also respect the right of the state to try to strike a balance" and that increasing the deductibility to 40% from 30%, provided for in the project, "is a fair increase."
Notably, the deductibility in discussion applies to the special windfall earning tax levied to revenues from sales at prices above a certain threshold of RON 85 per MWh, according to Avocatnet.ro. Specifically, 40% of the investments carried out by oil companies are deductible for the purpose of calculating the windfall earning tax.
The companies asked for a 60% ratio, from 30% in the existing form of the Offshore law (to be amended). All the expenditures, including the investments and the windfall earnings tax, are deductible for the purpose of calculating the income tax.