Insight
Romania approves long-awaited fiscal and regulatory reforms
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
After four years of upheaval, Romania has finalised investor-friendly amendments to its 2018 Offshore Law. This had disrupted plans for Black Sea gas growth, most prominently from the giant pre-FID Neptun Deep project. The reforms took effect after full approval by the country’s parliament and President in May. In our view, the law addresses several of the core points contested by Romania’s leading offshore operators. The rebalancing of value between investors and the state is significant, and the terms now also apply to deep onshore fields. Romania’s large-scale Black Sea gas resources matter both nationally and for the wider EU. Especially in the current geopolitical context. The Neptun Deep development would support the domestic energy transition and regional energy security, amid accelerated efforts to diversify away from Russian hydrocarbons.
Table of contents
- Executive summary
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Vital reforms of the 2018 Offshore Law, which had set the sector back
- Excess revenue tax (ERT) adjusted for offshore gas
- Tax stability reinstated for offshore projects
- Freedom to export offshore gas restored, but potential for price caps persists
- Separate upcoming reform also set to cancel use of ‘reference price’ for gas royalty
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Romania’s two main offshore projects gain commercial impetus
- Midia Gas Development (MGD) – value derisked, with production just weeks away
- Neptun Deep – FID back on the agenda in next 12 months, after four years of waiting
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A delayed crossroads for Romania’s gas market outlook
- Neptun Deep’s scale matters for the EU too
- But it still won’t be all plain sailing to a Neptun Deep FID
- The reforms reduce government share to competitive level, but are unlikely to change investors’ perspective
Tables and charts
This report includes the following images and tables:
- Romania - summary impact of fiscal changes on Black Sea value
- Fiscal benchmarking of model offshore gas field
- Excess revenue tax - marginal and effective rates
- Excess revenue tax - overview
- Gas price comparison - Romania sales price and ‘reference price’
- Midia Gas Development - value impact of fiscal reforms
- Neptun Deep - value impact of fiscal reforms
- Romania - gas supply-demand outlook
What's included
This report contains:
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