May 18 (SeeNews) - Romania's Chamber of Deputies on Wednesday said it approved legal amendments which are expected to unlock major offshore oil and gas projects in the Black Sea, helping the country secure its energy independence.
The bill was backed by 249 MPs, while 34 MPs voted against it, data posted on the lower chamber's website showed.
The new legislation received the Senate's backing on May 12 and now needs to be promulgated by president Klaus Iohannis.
Following the Senate vote, the amendments were expanded to allow the government to impose temporary restrictions on both the price and the sale of domestic natural gas production.
According to the new legislation, the Romanian state will have preemption rights and will receive around 60% of the income generated by offshore gas projects. The remaining 40% of the income will go to investors, such as oil and gas group OMV Petrom [BSE:SNP] and natural gas producer Romgaz [BSE:SNG], which will partner-up in the offshore gas project Neptun Deep.
The new law keeps unchanged the taxation regime for the duration of offshore gas projects and introduces a lower tax on gas sales. Also, it removes export restrictions for natural gas, except in emergency situations.
"This is perhaps the most important step we are taking towards energy independence. With the start of investments in the Black Sea, Romania will become energy independent, we will produce more natural gas than we consume, and the surplus will be able to be delivered abroad and Romania can become a regional energy security provider," energy minister Virgil Popescu said in a social media post on Wednesday after the lower chamber's vote.
"The law brings stability and predictability, a tax-friendly regime and I am convinced that it will help investors make the investment decision. Moreover, it protects Romania's national interests, so that in case of energy crisis we can intervene and redirect gas to domestic consumption and we can also impose a control on bilateral contract," he added.
Prior to the amednments, the law stipulated that half of the natural gas obtained from the offshore perimeters in the Black Sea will have to be sold on the domestic market, and enforced a progressive tax on additional revenues from offshore activities.
On May 3, Romgaz announced it has signed the contract for the acquisition of Exxon Mobil's 50% stake in the Black Sea offshore project Neptun Deep for $1.06 billion (1 billion euro). The transaction is expected to close in the second quarter of 2022. The other half of the rights and obligations under the XIX Neptun Deep Block concession is held by Romanian oil and gas group OMV Petrom.
OMV Petrom entered a joint venture with ExxonMobil for exploration of Neptun Deep Block in 2008. The block covers an area of some 7,500 sq km in water depths ranging from 100 to 1,700 meters, according to information posted on OMV Petrom's website.
In March, Austria's OMV, which holds a 51% stake in OMV Petrom, said it will make the final investment decision on the Neptun Deep project next year, pending a new offshore law from the Romanian parliament.
In October, Romania-based Black Sea Oil & Gas (BSOG) said that it expects to begin extracting natural gas from its offshore Midia Natural Gas Development (MGD) project in Romania in the first quarter of 2022.
Romgaz' shares traded 1.73% higher at 44.2 lei ($9.4/ 8.9 euro) on the Bucharest Stock Exchange as at 1131CET on Wednesday. OMV Petrom's shares traded 0.69% higher at 0.44 lei as at 1318 CET on Wednesday.
(1 euro= 4.9472 euro)
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