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ANRM proposes to set the oil royalties according to the price of gas at the Austrian stock exchange

By Emea Riga
The National Agency for Mineral Resources (ANRM) launched in public debate a draft order for the modification of the methodology for setting the reference price for natural gas, according to which the levies due to the state budget by the producers, which take into account the gas price at the Austrian scholarship.
Thus, the reference price for natural gas extracted in Romania is set monthly based on a formula that includes the average price of transactions made in the month preceding the period for which the reference price is calculated at the Central European Gas Hub (CEGH) AG, the hub operator Baumgarten, where the major shareholder is OMV Petrom.
The reference gas price for the calculation of royalties has not been changed since 2008.
In the proposal substantiation report, ANRM representatives showed that, following a decision of the Court of Auditors, the Agency concluded a research and consultancy contract with the Petroleum and Gas University of Ploiesti for research and technical expertise on setting the reference price of natural gas extracted from Romania.
In March 2017, a working group was set up, which proposed two options: Option I - Platts method, respectively a valuation based on the closing price of an external scholarship by Platts magazine and Variant II - the hub price method, respectively an evaluation based on prices and volumes traded on an external exchange.
Further, the report also states that, at the request of ANRM, variant III was developed - the ANRE price method, ie a price based on the internal and external price of gas (according to hub or Platts methods), establishing a weight for the domestic price.
"Following the analysis of the proposals / observations in the public debate, at the request of ANRM, Ploiesti UPG has revised the variant III and prepared the IV variant for the calculation of the gas reference price (elimination of the regulated market)", the report also shows.
'Following the analysis carried out by the team constituted by the Order of the ANRE President, according to the minutes concluded on 19.12.2017, proposes for the calculation of the natural gas reference price of variant II - the hub price method - valuation based on prices and volumes traded at an external exchange, only the calculation of an average price based on transactions at the CEGH hub, "the document states.
The proposed formula takes into account the average price of transactions made in one month at the respective hub, expressed in Euro per MWh, the average annual heat output of natural gas in Romania and the average exchange rate for the leu against the euro. Finally, the reference price of Romanian gas is expressed in lei per thousand cubic meters.
ANRM will hold a public debate on this issue on 7 February.
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