OMV Petrom shares therefore reached the highest price since the summer of 2015, and the company’s capitalization amounted to 21 billion lei (EUR4.51 billion).
In comparison, the main index of the Bucharest Stock Exchange, BET, which tracks the 13 most liquid stocks, including Petrom’s, gained 2.7% between September 17-21, 2018, the highest weekly growth rate in the past six months, helped by Petrom’s rise.
Last week, PSD (Social Democratic Party) senator Marin Gheorghe made two amendments to the offshore law. The first is that upstream offshore investments will be deducted from the calculation of the tax on additional revenue from the deregulation of the natural gas market. The second is that quotas within the royalty system and the requirement to trade 50% of the extracted volumes on the local market will remain constant over the entire oil concession agreement period.
“We see the news as encouraging for offshore explorations as it will ease the oil and gas companies’ tax burden by deducting capital expenditures and will provide fiscal stability – a key prerequisite of the local producer,” reads the daily report of BT Equity Research written by BT Capital Partners analysts.
The two amendments mean accepting the requests of oil companies, which could improve their profitability profile, including Austria’s OMV’s, the owner of Petrom.
The offshore law will reach the Senate plenum Monday and the Chamber of Deputies, the decisional chamber, on Tuesday, and be voted by the Chamber of Deputies plenum on Wednesday, PSD chairman Liviu Dragnea said.
Brent crude price rose 0.9% last week, while West Texas Intermediate crude oil price went up 2.6%, according to Bloomberg.
“The oil upward trend, supported by the market concern about the Iran supply and Saudi Arabia’s signals for the Brent quotes could be a favorable factor in a volatile environment,” says Claudiu Cazacu, chief analyst of the Romanian branch of X-Trade Brokers. (EUR1=RON4.6559)
(English version by Loredana Fratila-Cristescu)