Romanian PM Ponta to resume talks over oil and gas royalties with OMV.

By bne IntelliNews February 1, 2013
Romanian PM Victor Ponta said that the government wants to hike the oil and gas extraction royalties before end-2014 and will start negotiations on the issue with Austria's OMV - the majority owner of local oil company OMV Petrom, Ziarul Financiar daily reported. The royalties should rise to 20-30%, minister-delegate for energy sector Constantin Nita has said recently. Currently, the royalties are 3.5-13.5%, depending on the yield of the well. Royalties for gas and oil are supposed to remain flat by the end of 2014, under OMV's privatisation contract. Ponta's statement on re-negotiations comes after the Romanian government charged a 60% tax on the supplementary revenues derived by the companies from the sector thanks to the gas price liberalisation. The tax is enforced by the end of 2014 - and it seems to be a temporary replacement for higher royalties. OMV Petrom produces nearly 5bn cubic metres of gas per year - a half of the country's output. The remaining domestic output is produced by state-controlled Romgaz, plus some much smaller independent oil and gas companies.

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