Romania to increase oil and gas royalties

Romania is set to increase the royalties it receives from oil and gas production, according to reports.

The nation’s royalty stability agreements and temporary taxes, which were set in 2004, are set to expire this year. The current average royalty rate of 7-8 per cent is predicted to climb to at least 10 per cent when the new framework is set at the beginning of 2015, analysis firm GlobalData said in a new report.

Will Scargill, GlobalData’s upstream fiscal analyst, said that despite this expected increase in royalty levels, it is likely that the Romanian government will set different rates for onshore and offshore fields.

“This will allow the country to raise its take from onshore production, while at the same time offering an attractive climate for exploration in the Black Sea, where costs are high,” he said. “This is particularly the case in deepwater areas. Different rates may also be set for unconventional operations in order to incentivize exploration of shale plays.”à‚ 

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