The state budget lost over Ron 7 billion between 2010 and 2015, as the reference price for petroleum royalties had not been updated since 2008, according to two inspections of the Accounts Court, said Dorinel Unsarescu, counsellor to the president of the National Agency for Mineral Resources (ANRM).

ANRM organised a public debate on Wednesday regarding the update of the reference price for natural gas, according to which the petroleum royalties owed to the state budget by producers are calculated.

“The reference price for calculating royalties has not been updated since 2008. This price is currently RON 495 per a thousand cubed meters. In the meantime, the market has evolved, and there have been deregulations in 2013 and 2017. During this period, unfortunately, ANRM did not adjust the level of the reference price so that the proceeds to the state budget would reach the market level,” said Daniel Unsarescu at the beginning of the debate.

Unsarescu told associations from the oil and gas industry that ANRM will take into account their recommendations in setting the new reference price for gas: “The Romanian state needs serious partners, but a serious partnership means fair conditions for both parties. It is in your interest for these conditions to be fair, to be the premises of some long-term contracts. We are open to all your recommendations.”

Recently, ANRM launched a public debate for a project which aims to change the methodology for setting the reference price for natural gas, which takes account of the gas prices on the Austrian stock exchange. Currently, the reference price is established monthly according to a formula which includes the average price of transactions in the previous month, for which the reference price is calculated at the Central European Gas Hub AG, the operator of the Baumgarten hub, where the majority stakeholder is OMV.

In their proposal, ANRM representatives showed that, following a decision by the Accounts Court, the agency signed a research and consulting contract with the Oil and Gas University in Ploiesti to conduct research and get technical expertise for setting the reference price for natural gas extracted from Romania.

A work group was constituted in March 2017, and it proposed two options for evaluating the price based on external markets. At ANRM’s request, a third method which combines internal and external markets was developed, and this was later revised into a fourth method which combines average prices of transactions at an external hub, the annual average superior calorific value for natural gas in Romania and the average RON/EUR exchange rate.