160m euro paid as royalties to state budget

Companies paid approximately 6,000bn ROL (160 million euros) as royalties to the state budget last year, Maria Stratulat, chairperson of the National Agency for Mineral Resources (ANRM) said. The start of the works on the highway built by US-based Bechtel Company, the production growth or the entry of new producers such as Germany’s Wintershall could give a boost to the volume of royalties collected by the Romanian State this year, ANRM officials say.

“Companies in the oil and natural gases sector account for approximately 80% of the total royalties collected, the level of which remained constant in ROL compared with the previous year,” Maria Stratulat said.

The royalty is a tax paid by a leaseholder of minerals to the owner of minerals, the Romanian State in this case, experts in this field say. It is usually expressed as a percentage of the value of the production sold.

In case of oil and natural gas producers, the royalty may range from 3% to 13.5% of the value of the production sold, depending on the “strength” of the deposit. Producers pay 2 euros per 1,000 litres in the case of mineral water, and 6% of the value of the production sold for ornamental rocks (like marble for instance).

In other countries, whose reserves are larger and more readily extracted, the royalty may go up to 50% of the production sold, as is the case for the oil production in Oman (a Persian Gulf country), which has rich oil deposits.

Romania’s oil and natural gas market sees SNP Petrom, producer of oil and natural gases, and Romgaz Medias (the largest natural gas producer on the market) as the most significant payers of royalties. Petrom producers 5.6 million tonnes of oil and 5.7 billion cubic metres of natural gases, while Romgaz produces 7 billion cubic metres of natural gases.

The foreign companies have spent more than $220 million on exploration operations in Romania so far. Such companies include oil giants like Shell (more than $70 million), Amoco (now part of British Petroleum), Total (France) or Conoco (US). All these giants have gradually left the Romanian market, making room for medium-sized and small players.

The only company to have struck gas after 1990 in Romania and therefore moved from exploration to production of natural gases was Germany’s Wintershall. It began production of natural gases near Sighisoara six days ago, after spending some $13 million at its own risk. It is slated to become royalty payer as of this year.
adrian.mirsanu@zf.ro