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March 21, 2023

Basescu to Petrom: As of 2014, Romania to have same royalties as Arab countries

Talking on public television on Monday evening, President Traian Basescu continued to express his dissatisfaction with Petrom’s price policy. The President stated that Petrom should expect a royalty level similar to the one seen in Arab states starting in 2014, the year in which the royalty that Romania receives from oil extractions will be renegotiated. The President also reminded the listeners that oil companies have been fined. “The Competition Council has issued a fine of EUR 300 M against oil companies in Romania. Apart from that, one can’t do anything but read and apply the contract signed during the Nastase Government,” he pointed out. Asked whether all royalties should be reanalyzed, not just the royalty paid by Petrom, the Head of State answered that royalties should no longer be used as state budget revenues but should be placed into a development fund. “The issue of Petrom’s royalty, which is meager, very small, extremely incorrectly negotiated, springs into attention, but you should know that the situation is similar in the case of royalties for gravel, mineral waters and many others. So there has to be a royalty policy in my opinion,” President Basescu added. The statements came after the Head of State recently announced that he has cut all ties with Petrom as a protest against the profit that the company registered during the crisis, adding that the company’s policy is “incorrect.” “I’m the one that has cut all ties with Petrom as a protest against the excess profit it has registered at a time of crisis,” the President stated. Traian Basescu added back then that he had numerous discussions with Petrom and with the Austrian President on this issue. Petrom Group registered a record profit last year, a profit that grew by 72 per cent to RON 3.759 bln (EUR 887 M), the highest profit ever registered by a company in Romania, and record sales of RON 22.61 bln (EUR 5.3 bln). On the other hand, Petrom could invest EUR 1 bln on the Romanian market this year, 70 per cent of that sum being earmarked for oil and natural gas exploration and production, Petrom general manager Mariana Gheorghe stated in an interview, gandul.info informs. “In the last 7 years we’ve invested EUR 7.7 bln, approximately EUR 1.1 bln per year, in order to reach the strategic goals that were determined by the company’s situation, by its condition at the time of privatization, but also by market conditions,” Gheorghe stated. In what concerns “the excess profit” President Basescu talked about, the general manager of the largest fuel producer and distributor in Romania stated: “We’re sorry the President has come to this conclusion. However I hope he will reconsider this attitude and will see the good things that this company is going in the Romanian society.”

“Wise guys” forced to accept the state’s conditions

Warnings come from Economy Minister Lucian Bode too, who announced for Mediafax that the government will cancel, “in conditions in which the state won’t lose,” the bilateral contracts through which Hidroelectrica is selling energy, unless the contracts’ beneficiaries accept the price hike, the lowering of the contracts’ duration and of the quantities supplied. He added that by the end of March the ministry will discuss the issue with all companies that have contracts with Hidroelectrica. The minister of Economy specified that the gradual removal of regulated prices for electricity will require a single step this year, with 15 pc market opening in September for industrial consumers, which will not automatically lead to increased tariffs. Until Monday the institution’s officials had met the representatives of Alro, Europec, Electromagnetica, Alpiq Romindustrie, Alpiq RomEnergie and Energy Holding. The renegotiation of these contracts and the cancellation, within the limits of the law, of contracts that cannot be renegotiated were the demands of IMF representatives. At the same time, the Economy Minister believes that the opposition will take part in the debates on the energy law, being of the opinion that both the government and the USL have common projects in what concerns this sector. Bode also said Electrica employees can buy later this year shares of privatized state company subsidiaries, a process that was delayed in 2005 and regarding Nabucco project, Government will accept any version of its construction because any solution that will build the pipeline consortium, is a priority plan for Romania. It will also continue Cupru Min privatization, which owns over 60 pc of Romania’s copper reserves and Ministry of economy waits for offers from interested companies, although it was a solution in public-private partnering.


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