GIGI DRAGOMIR, REINSTATED AT THE ANRM Is the formula for gas royalties the true reason for the resignation of Tudose?

Former prime-minister Mihai Tudose and the current interim prime-minister Mihai Fifor, seem to have something in common, aside from the position they fill - they seem to be seriously concerned with the natural gas royalties.

Which are the responsibility of the National Mineral Resources Agency (ANRM).

The importance of the issue when it comes to the government stems from the fact that the dismissal of ANRM president Gigi Dragomir was one of the last decisions made by Mihai Tudose, at the end of the year, just between Christmas and New Year's Eve, and its reinstatement before the Authority was one of the first decisions of interim Mihai Fifor, published yesterday in the Official Gazette. Our sources said that dismissal of Dragomir has caused a major row between Mihai Tudose and Liviu Dragnea, as the latter personally went to the Victoria palace to prevent the dismissal of the president of the ANRM.

Besides, Mihai Fifor rushed to undo the decision of Mihai Tudose, before the installation of the new PSD prime-minister, Viorica Dăncilă.

Liberal deputy Daniel Zamfir has publicly accused Tudose of dismissing Dragomir due to the order 525 of December 22nd, issued by the ANRM thorugh Dragomir, which changed the calculation methodology for natural gas, meaning that the reference price for natural gas (meaning the minimum price allowed in the natural gas transactions considered by the Romanian state in order to implement the royalties) was going to be brought up to the price level that natural gas sells at in the market.

The order was never printed in the Official Gazette, and market sources told us that it had been blocked by the government, through the involvement of Andreea Lambru, as deputy secretary general of the Government, as well as of Mihai Tudose personally.

In fact, the next day after Tudose's resignation, the information appeared that Andreea Lambru had been promoted as secretary general of the government.

Now, it remains to be seen whether Mihai Fifor will overturn this decision of Tudose as well. Also, it is worth watching whether once reinstated at the ANRM, Gigi Dragomir will stand by his order to update the formula for calculating the reference for the natural gas royalties, taking into account the Austrian price, or whether he will change that order.

After Gigi Dragomir was reinstated, Daniel Zamfir posted the following on Facebook: "I hope that this reinstatement represents the admission of thje mistake made by Tudose! Not necessarily a mistake when it comes to Mr. Dragomir, but first of all when it comes to the blocking of the ANRM Order to update the natural gas reference price!

I hope that the interim prime-minister has already sent the order in question to be published.

It would a be demonstration of good-faith, given that the Romanian state is losing hundreds of thousands of Euros every day! Otherwise, this will simply remain just another settling of scores between them...

I am waiting for your next step, Mr. Fifor!"

Mr. Zamfir had shown that currently, the reference price for calculating the natural gas royalty is 45.71 lei/MWh, and it hasn't been updated since 2008, whereas in the market, producers sell it for 89 lei/MWh.

The Romanian Association for Oil Exploration and Production (ROPEPCA) explained that gas producers pay the royalty based on the higher price of the reference and the market one.

On Wednesday, ROPEPCA denied, in a press release, the "grave and unjustified" accusations made against the Romanian producers of natural gas, "accusations which concern the alleged insufficient payment of natural gas royalties", which it says are "being discussed in public increasingly often".

ROPEPCA wrote: "«The technical instructions concerning the takeover and the sale of the quantities of oil and representing the royalty», as they are evidenced in the Order of the ANRM no. 98/1998, but this states the fact that the amount of the output is determined by taking into account the prices used by the holders of oil concessions in exploiting their own oil quantities, prices which are not allowed to be lower than the reference prices set and announced quarterly by the ANRM. In other words, the reference price for domestically produced natural gas published by the ANRM is nothing else but a minimum limit, below which the price used for calculating the royalties is not allowed to go".

Some sources close to the situation recently explained to us that producers also have bilateral contracts, in which they are interested in using the reference price, which currently hasn't been updated since 2008, in order to reduce the royalties they are expected to pay.