The Romanian Parliament passed on Wednesday the Offshore Law, which will likely unlock Black Sea investments. The bill is set to be finally approved by president Klaus Iohannis as it is considered essential in keeping Romania’s energy security and in providing stability in the region in relation to the current sanctions against Russia.

Romania is moving ahead with a plan to unlock stalled natural gas projects in the Black Sea as Europe searches for new energy resources to cut reliance on Russia following its invasion of Ukraine.

Romanian government expects to kickstart investments in gas for its needs. However, the offshore bill stipulates the government would be entitled to collect 60% from the duties and taxes on the Black Sea gas. Therefore, “Romania becomes an important regional judge”, said Marcel Ciolacu, president of the Chamber of Deputies.

The Offshore Law authorizes gas producers to pay additional fees when the gas price will exceed 85 RON/Mwh. The taxation fee progresively increases from 15% to 70%, depending on the price of the gas.

According to the bill passeed by the Romanian lawmakers, investors can deduct a maximum of 40% from the total tax on additional income for the investments carried out.

The new law guaranties that the royalty payment and the specific tax regime will not reshape while the accords are being established. Furthermore, the law established the same financial framework for both offshore and deep onshore investments.