OMV To Pay Higher Austrian Oil And Gas Royalties

GAENSERNDORF, Austria, April 8 (Reuters) - OMV will have to pay higher royalties for oil and gas production in Austria backdated to the start of this year, its chief executive said on Tuesday.

Austria's centrist government is seeking new revenue sources as it grapples with paying billions of euros in aid to failing nationalised banks while striving not to cut public services.

OMV CEO Gerhard Roiss said the royalties would increase by about 37 million euros ($51 million) a year from about 140 million now, and said the measure had been sprung on the Austrian energy firm without notice by the economy ministry.

"We hadn't budgeted for this," he told a news conference in Lower Austria province, where OMV has dozens of oil and gas fields. Austria is OMV's third-biggest production region after Romania and Norway.

Roiss said OMV would double its investments in Lower Austria to 400 million euros over the next two years - part of its overall 3.9 billion-euro investment plan, which is mainly for exploration and production - despite the royalties hike.

He said the firm aimed to keep production in Lower Austria roughly stable at about 35 million barrels of oil equivalent per day through the use of new technology to stretch out the lifetime of fields, some of which have been in operation for decades.

"This country needs long-term investments and not short-term measures to plug a budget gap," he said.

Social Democrat Chancellor Werner Faymann said last week he would keep a levy on banks' balance sheets that raises around 640 million euros a year despite a parallel programme to set up a wind-down fund for ailing euro zone banks.

The chief executive of UniCredit's Bank Austria protested against the decision in a newspaper interview published on Tuesday and demanded talks with the government.

"We pay record high levies in Austria. If we now have to pay additionally into the new ECB rescue fund, we will have to find a solution together with the politicians," Willibald Cernko told the Kronen Zeitung. "This will clearly overburden the banks."

($1 = 0.7277 euros)

(Reporting by Georgina Prodhan; Editing by Pravin Char)