By Andra Timu, December 03, 2014
Romania delayed raising taxes for extracting its mineral resources to 2016 as the government seeks to discuss the plan with energy companies that will be affected by the change.
The cabinet in Bucharest extended the current system of royalties throughout next year, Budget Minister Darius Valcov said today. It will hold talks with companies including OMV Petrom SA and Romgaz SA to decide on tax changes without jeopardizing their investment plans, Prime Minister Victor Ponta said.
“Romania must have a modern, European system of royalties, but we can’t approve it overnight,” Ponta said in a televised speech.
The country plans to increase royalties from current 3 percent to 13.5 percent of mineral resources produced and bring the fees closer to those in other European Union countries to boost state revenue and fund investments. It’s betting on new gas discoveries in the Black Sea, following exploration by Exxon Mobil Corp (XOM:US)and Petrom, to secure energy independence by 2020, according to Energy Minister Razvan Nicolescu.
Taxes should have different levels for oil and gas production from on-shore and off-shore fields, depending on the level of investments needed for exploitation, Ponta said in June.
The current system of royalties expires at the end of this year, according to existing legislation, and it will be extended via an emergency government decree, Valcov said.