Austria plans to increase royalties for oil production

Austria plans to raise around 76 million euros ($105.4 million)in extra revenue this year and next by increasing royalty rates on domestic oil and gas production, according to draft legislation unveiled on Monday to help limit the budget deficit.

The move will hit companies such as OMV, whose chief executive said last month the hike was sprung on the sector without advance notice. The packet of measures submitted to parliament aims to reduce the budget deficit by a cumulative 553 million Euros in 2014 and 2015, according to a summary released by parliament’s press service.
The levy on crude oil rises to between 15 and 20 percent from up to 14 percent now, and on natural gas to between 19 and 22 percent from up to 19 percent now.
OMV CEO had said in April the royalties would increase by about 37 million euros a year from about 140 million now. Austria produced a very modest 17,000 barrels per day of oil in February this year, according to government data.