OMV Petrom will have to “take Romania's interests into account” when selling gas from the Black Sea / What agreement did the Romanian state make with the oil company

The government approved an additional act to the oil concession agreement in the Neptun Deep perimeter, with OMV. The act relates to gas marketing policies, oil industry sources told HotNews

The Romanian state will be able to restrict gas sales of OMV Petrom outside Romania at any time, without paying compensation, according to a provision in the additional act. Thus, OMV Petrom, the holder of the concession agreement, will “have to take into account the national interests and the Romanian consumers”, industry sources explained to HotNews. Due to sensitive topics in the contracts, the two sources asked to remain confidential.

Practically, only for the contracts already signed, which currently represent 10-15% of production, OMV Petrom does not give up the right to receive the established revenues.

However, for the export contracts already signed, in case of restrictions imposed by the state, OMV Petrom will benefit from the revenues established in those contracts.

OMV – Uniper contract

The most important contract signed by OMV Petrom for the sale of gas from the Black Sea is with the German company Uniper.

The state will decide what happens to the rest of the uncontracted quantities.

We remind you that the first quantities of gas from the Neptun Deep perimeter will be extracted in 2027. Deposits of at least 100 billion cubic meters of natural gas are estimated, equivalent to ten years of gas consumption in Romania.

The AUR party has repeatedly accused that gas production from the Black Sea will be exported, at low prices.

OMV Petrom waives all litigious rights

The additional act also provides that OMV Petrom resumes the litigation opened in Paris against the Romanian state. But, at the same time, he waives “all litigious rights,” the sources said. Basically, he can no longer open a new trial.

In June 2023, OMV Petrom sued the Romanian state at the International Court of Arbitration in Paris – ICC, claiming provisions of the offshore law that impose limits on the commercialization of natural gas production from the Black Sea.

We remind you that the Government approved, on Tuesday, in an extraordinary meeting, a draft decision for the approval of an additional act to the concession agreement for gas exploration in the Black Sea.

The government announced that one of the provisions is the two-year extension of the concession agreement.

Royalties increase by hundreds of millions of lei

Royalties for the oil and gas that OMV Petrom extracts for the licenses taken over during privatization will increase by 40%, the Government announced in a press release.

Oil royalties are taxes applied to production, which are collected from the state budget. They also increased by up to 28% in October 2023, after 20 years in which they did not undergo any change.

The state obtained, last year, over 2 billion lei from royalties applied to the production of hydrocarbons. A 40% increase would mean an addition to the state budget of over 800 million lei.

For crude oil, the royalties are between 4.5% and 16%, and for gas, between 4.5% and 15%, of the value of the gross production extracted, depending on the size of the field.

Changes after Bolojan's visit to Austria

Another agreement is that Romania will no longer pay OMV Petrom the cost of closing the wells that are no longer used and the penalties for the debts that arose from various disputes, the Government also states.

All these changes in the additional act took place after Prime Minister Ilie Bolojan's visit to Austria. He had, a week ago, a meeting with the Federal Chancellor of Austria, Christian Stocker.

“We have succeeded, 20 years after the signing of the initial contract, to rebalance the cooperation with OMV Petrom. The objectives are for the Romanians to benefit from energy independence and a predictable energy market, for the state to have correctly sized revenues, and for the OMV Petrom company to continue to invest and develop to become a strong player at the regional level on the energy market”, declared Ilie Bolojan.