Romanian-based Black Sea Oil & Gas received a construction permit from the country’s energy ministry for an offshore gas project, but it said new taxes could make it hard to go ahead with the development.
The company, controlled by private equity firm Carlyle Group LP, discovered two wells holding an estimated 10 billion cubic meters of gas in 2008 some 120 kilometers offshore in the Black Sea.
It hoped to start production by 2020, pending a final investment decision, becoming the first in a line of companies to tap the European Union state’s vast offshore resources.
But Romania’s Social Democrat government approved a slew of taxes via emergency decree in December without an impact assessment or public debate, including a 2-percent tax on turnover for energy firms and a cap on gas prices.
That came on top of other new laws for offshore drilling stipulating that Romanian companies would need to sell at least half their yearly gas output in the country.