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The government urges Petrom and Romgaz to sell all gas exported at 55 lei / MWh by 2021, according to a recently released bill. In the explanatory note to the document, it is explicitly stated that this price is much lower than the price at which the gas currently circulating in Romania is exchanged.
Details, HERE
According to the context of the GD project, the average price of The sale of natural gas by domestic producers in the centralized market between April 2017 and August 2018 increased from 70.93 lei to 77.72 lei. The estimated average sales price of natural gas by domestic producers in the centralized market as at 31 March 2019 will be 80.25 lei / MWh
Therefore, even according to the Government's estimate, the price set for Romgaz (public company) and Petrom (private company) is 31% lower than the market price in Romania, given the March of next year
Petrom and Romgaz will lose large sums of money because of the cap of this price, from the moment of the adoption of the HG-now (July), the weighted average price of gas for RCE, so the average price Petrom and Romgaz sell gas on the platform trading form is 76 lei. The same level is valid for August, and it is the summer months, with low consumption and so on.
So, if HG is passed this month, Petrom and Romgaz will be forced to sell gas with 25% cheaper Obviously, the process will increase during the winter months, when companies could get a better deal price.
The winners will be Romanian, domestic and commercial consumers, who will have smaller and more consistent bills if the HG becomes law. ] The decision is a severe attack on the company and the profitability of both companies and the first question is whether, at this level imposed by law, the imposed selling price justifies the activity of natural gas extraction in Romania. It's hard to calculate because the numbers given are not enough.
This HG project arrived two days after Darius Vâlcov, who mentioned the intention to lower the price of gas by 20%.
"Two large companies, I will not give them their names, they have more than 95% of the Romanian production and then they allow a production price of 27 lei to 81 lei, a profit of 300 A part of the Romanian state, because it is a shareholder in both Why? Because some managers have understood that we must go ahead We increase the price, that finally the one who supports it is a fool who has to pay, rather than increase the production and diversify the sources, so that we can sell more, maybe even export, but at a lower price, "said Vâlcov
after the declaration of which the government wants to flatter the price [19659002] According to the first three-month report of Petrom, published on the stock market, the cost of production of the company is 11.9 dollars per barrel equivalent to oil (bep) Romom does not publish it. not the cost of oil and gas because extraction is naturally combined for both resources: the oil extraction probe and the gas associated with the oil field. 1 MWh is the equivalent of 0.59 bo. Thus, the cost of extraction is 7 MWh, or $ 28
. The cost of production includes only OPEX operating expenses and includes material expenses, utilities, salaries, maintenance services. Does not include royalties, depreciations, investments and exploration costs
The average royalty is about 7% for hydrocarbons extracted from Romania (the legal percentage is between 3.5% and 13%). 5%, depending on the strength of the deposit, but the Romanian fields affected by the prolonged extraction deliver little but not applied to the production or the imposed price of 55 lei, but to that of the Vienna Stock Exchange as decided by the National Mineral Resources Authority last spring [19659002] It fluctuates, but currently it is about 23 euro / MWh (about 107 lei), so at the cost of production add 7.5 lei and here. it reaches 35.5 lei / MWh Much more than Vâlcov said, but that's not all.
Petrom and Romgaz also pay an additional tax on the extraordinary profits from the liberalization of the gas market, that add to the above, and Petrom pays, just for pri x oil, and 0.5% of the value of crude oil extracted from Romania
At last year's price (the tax is not calculated at the price of Vienna, but at the lower price of Petrom contracts sent to the ANRM), the company for oil and gas was 565 million lei and the total amount paid to the state the other three taxes: profit tax, tax of 0 , 5%, and the additional income tax obtained from the liberalization of the gas market, was 667 lei. Petrom did not disclose the amounts paid.
Under future legislation, if it is approved, it is understood, without further clarification, that a 60% tax will be applied to the difference between the imposed price of 55 lei / MWh and the price of 45.71 lei established by the previous legislation specific to this tax. In other words, the tax and fees rise to 41 lei, out of the 55 lei that Petrom and Romgaz are required to collect for the gas extracted, without the tax on profits and then on the dividends, if any.
Romania produces about 10 billion cubic meters of gas per year, being the fourth largest producer in Europe, after Norway, the United Kingdom and the Netherlands. Consumption is about 11 billion, the difference with Russian imports is
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