Romania extends OMV Petrom Permits; Onshore royalty tax will jump

The coalition government of Romania announced on Wednesday that it had extended exploration and production licenses for energy group OMV "Petrom" (and agreed to increase its onshore royalties by approximately 40%).

OMV Petrom is a majority-owned company by Austrian OMV. It supplies a third of Romanian gas, fuels, and electricity.

OMV Petrom, in partnership with the state-owned Romgaz, is developing the deepwater project Neptun Deep, located in the Black Sea. This project, which contains an estimated 100 billion cubic meters recoverable gas, will double Romanian gas production by 2027 and make it the EU's largest producer.

The government has extended OMV Petrom’s exploration permits for the Black Sea another two years. Once the Neptun Deep Project is completed, the company will drill a 1,500 metre deep exploration well at a cost of?90?million euros (?105 million dollars).

The company has also extended its onshore production permits for 15 years, until 2043. It will continue to explore onshore fields in order to replace those that have been depleted.

The company and the government have signed a memo which envisages an increase of 40% in royalty taxes for onshore gas production. The company will pay for the costs associated with shutting down abandoned gas wells. This includes retroactive costs estimated at 600 million euros.

OMV Petrom announced that it would reveal the impact of the agreements on the economy in the first quarter 2026 once they were included in updated legislation and contracts.

The hard-right Alliance for Uniting Romanians, the second largest party in Romania and the leader of?opinion surveys, has criticised the government for extending exploration and production permits to the company. The party said that Romania should be in control of companies using its resources.

Neptun Deep, Romania's largest energy project for almost two decades. OMV Petrom, the biggest tax payer for the state budget, has invested around 20 billion Euros. Reporting by Luiza Illie. Mark Potter edited the article.

(source: Reuters)