Norway Plans Tax Relief for Oil Industry
Norway plans to ease the tax burden of oil and gas producers, to provide the sector with a "shot in the arm" and curb the decline in investment caused by low prices, its government said on April 30.
The proposals are aimed at boosting investment by up to krone 100bn ($9.7bn) in 2020 and 2021, the government said. They will be submitted as a bill to Norway's parliament on May 12 and will need to be checked against European competition rules.
Under the measures, the deduction from tax for investments decided by the end of 2021 and completed no later than 2024 will be accelerated. Companies will also be able to claim the tax value of losses in 2020 and 2021.
Petroleum minister Tina Bru described the measures as a "shot in the arm" for the sector.
"The Norwegian oil and gas industry and supply industry are now in the midst of a crisis unlike anything else we have experienced," she said. "Field developments and large-scale maintenance projects are the basis for much of the activity in the supply industry. The measures we are presenting now are a like a shot in the arm, an incentive to carry out more development projects on the Norwegian continental shelf than would otherwise have been possible."
While the government is keen to support investment, it will also impose production cuts starting in June, to help prop up flagging oil prices, which will result in some field start-ups being delayed.
The government also wants to introduce a green restructuring package, providing more funding for research, development and innovation to help the industry cut its emissions. Details of this support will be announced when the government presents a package of measures for its Covid-19 exit strategy towards the end of May.