Oil producers want to pay smaller royalties for oil extraction in Romania, said Artur Stratan, president of the Romanian Petroleum Exploration and Production Companies Association.

“We don’t want to be the Government’s budgetary piggy bank anymore,” he added, cited by local Digi24.

However, Romania now charges some of the smallest royalties for oil extraction in the world. The oil & gas producers pay the state between 3.5% and 13.5% of the production based on how rich the deposits are. As most of them are mature and largely exhausted, the paid royalties are close to the minimum value. In countries like Venezuela, Russia or Nigeria, the oil & gas producers need to pay back the state up to a third of the production’s value.

The Romanian state’s revenues from oil extraction have increased lately not because the royalties went up, but due to an increase in the price of natural gas.

Local oil producers are also unhappy about the Government’s decision to delay removing the tax on special constructions, which was introduced last year, to 2017.

Investments in the oil industry have dropped by 30% this year, due to the decrease in the price of the oil barrel below USD 50. Without new investments, Romania could run out of oil in ten years, according to Stratan.

Romania currently has about 240 oil deposits under exploitation, 90% of which are over 40 years old. Most of Romania’s oil deposits are operated by OMV Petrom.

editor@romania-insider.com