Austria to Hike Royalties on Oil, Gas Output

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.

"The federal government thus intends to generate extra revenue of 30.3 million euros this year and 45.83 million in 2015" from the levy, it said.

OMV CEO Gerhard Roiss had said in April the royalties would increase by about 37 million euros a year from about 140 million now. Austria is OMV's third-biggest production region after Romania and Norway.

The government last month unveiled a budget that envisions public debt rising to a record 79.2 percent of gross domestic product and a deficit rising to 2.7 percent this year from 1.5 percent in 2013 due to costs of winding down nationalised bank Hypo Alpe Adria.

The centrist coalition government is seeking new revenue sources as it grapples with paying billions in bank aid.
 

Austria produced a very modest 17,000 barrels per day of oil in February this year, according to government data.

($1 = 0.7212 Euros)

(Reporting by Michael Shields, editing by William Hardy)