PM Victor Ponta: Oil royalties will only change for the new concession agreements

The current regime of oil royalties will remain in force for the concession agreements in progress and the new royalties, which will enter into force as of next year, will only apply for the new concession agreements, signed after changing the legislation on royalties, and will be differentiated depending on the of hydrocarbon field exploited, onshore or offshore, PM Victor Ponta stated at Bucharest Energy Forum. “The new law cannot be applied retroactively”, Ponta stated when asked if royalties could be changed for the holders of concession agreements currently in force, which stipulate the current royalty regime and which have a duration of 20-30 years. In his speech, Ponta has repeatedly stressed the need to have a royalty regime ensuring stability and predictability for investors. “We don’t want the state budget to collect a lot from very little, but little from a lot”, the Prime Minister showed. He added that the new legislation on the oil royalties would establish a differentiated regime, depending on the type of hydrocarbon field exploited, royalties for offshore resources following to be lower than those for onshore fields, as a result of the fact that investments required to develop the offshore hydrocarbon fields are significantly higher. Companies that produce oil and gas currently pay royalties between 3.5% and 13.5% of production, depending on the type of hydrocarbon fields.