Romania Upstream Fiscal and Regulatory Report - Frequent Legislative Changes Create Uncertain Environment

Romania offers concession agreements for oil and gas exploration and production activities under a concession framework. New legislation has created uncertainty in the sector in recent years, and additional changes to fiscal terms have created instability in the fiscal regime. A new offshore law came into force in November 2018 after significant political wrangling, introducing a new windfall gas tax. However, the industry still faces significant uncertainty as a result of numerous other proposals for tax and market regulation.

“Romania Upstream Fiscal and Regulatory Report - Frequent Legislative Changes Create Uncertain Environment”, presents the essential information relating to the terms which govern investment into Romania’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Romania’s upstream oil and gas investment climate.

Scope

Overview of current fiscal terms governing upstream oil and gas operations in Romania

Assessment of the current fiscal regime’s state take and attractiveness to investors

Charts illustrating the regime structure, and legal and institutional frameworks

Detail on legal framework and governing bodies administering the industry

Levels of upfront payments and taxation applicable to oil and gas production

Information on application of fiscal and regulatory terms to specific licenses

Outlook on future of fiscal and regulatory terms in Romania

Reasons to buy

Understand the complex regulations and contractual requirements applicable to Romania’s upstream oil and gas sector

Evaluate factors determining profit levels in the industry

Identify potential regulatory issues facing investors in the country’s upstream sector

Utilize considered insight on future trends to inform decision-making

Table of Contents

1. Table of Contents

1. Table of Contents 1

1.1. List of Tables 3

1.2. List of Figures 3

2. Regime Overview 4 ...

1. Table of Contents

1. Table of Contents 1

1.1. List of Tables 3

1.2. List of Figures 3

2. Regime Overview 4

3. State Take Assessment 6

4. Key Fiscal Terms 7

4.1. Royalties, Bonuses and Fees 7

4.1.1. Royalties 7

4.1.2. Drilling Permit Fees 8

4.2. Additional Oil and Gas Taxes 8

4.2.1. Tax on Excess Revenue from Gas Price Deregulation 8

4.2.2. Offshore Supplementary Income Tax 9

4.2.3. Special Tax on Revenues from Natural Resources other than Natural Gas 9

4.3. Direct Tax 10

4.3.1. Corporate Income Tax 10

4.3.2. Deductions and Depreciation 10

4.3.3. Withholding Tax 10

4.4. Indirect Taxation 10

4.4.1. Value Added Tax 10

4.4.2. Customs and Excise Duties 10

4.5. EU Emissions Trading Scheme 11

5. Regulation and Licensing 12

5.1. Legal Framework 12

5.1.1. Governing Law 12

5.1.2. Contract Type 12

5.1.3. Title to Hydrocarbons 13

5.2. Institutional Framework 13

5.2.1. Licensing Authority 13

5.2.2. Regulatory Agency 13

5.2.3. National Oil Company 14

5.3. Licensing Process 14

5.3.1. Licensing Rounds 14

5.3.2. Bidding Process 14

5.4. License Terms 15

5.4.1. Duration and Relinquishments 15

5.4.2. Work Obligation 15

5.4.3. Domestic Market Obligation 15

5.4.4. Local Content 15

6. Outlook 16

7. Appendix 17

7.1. References 17

7.2. Contact Us 18

7.3. Disclaimer 18

List of Tables

1.1. List of Tables

Table 1: Regime Overview 4

Table 2: Romania, Royalty Rates (%), Crude Oil and Condensate 7

Table 3: Romania, Royalty Rates ...

1.1. List of Tables

Table 1: Regime Overview 4

Table 2: Romania, Royalty Rates (%), Crude Oil and Condensate 7

Table 3: Romania, Royalty Rates (%), Natural Gas 7

Table 4: Romania, Offshore Supplementary Income Tax Rate Increments for Prices Exceeding RON85/MWh 9

Table 5: Bid Marking Scheme 14

Table 6: References 17

List of Figures

1.2. List of Figures

Figure 1: Regime Flow Chart 5

Figure 2: Romania, Indicative NPV10/boe, IRR and State Take Comparison, Regional 6

Figure ...

1.2. List of Figures

Figure 1: Regime Flow Chart 5

Figure 2: Romania, Indicative NPV10/boe, IRR and State Take Comparison, Regional 6

Figure 3: Romania, Legal Framework 12

Figure 4: Romania, Institutional Framework 13

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