![]() – Mikael Holter, Copyright 2014 Bloomberg.In a letter of February 1958 to the Ministry of Foreign Affairs, the Norwegian Geological Survey wrote that: “The chances of finding coal, oil or sulphur on the continental shelf off the Norwegian coast can be discounted”. ![]() The deadline for companies and other involved parties wishing to comment on the proposal is today. ![]() “We’re strongly disappointed,” the letter said. The transition will possibly also exclude Exxon’s Balder Phase 3 project, which has an estimated value of 5.4 billion kroner, that company said in a separate letter to the finance ministry. “The new law worsens the Norwegian shelf’s competitiveness,” the company said in the letter signed by its finance manager for Norway, Frank Rogne. One example is the company’s Ormen Lange gas field, which supplies 20 percent of the U.K.’s demands and may need more compression facilities offshore, Shell said. Though the increase from May isn’t meant to be retroactive, it could apply to new phases of projects started earlier, Shell said. While Norway’s government has ordered a report on the consequences of the tax increase and hasn’t ruled out a reversal, its proposed transition rules may lead to resources being left in the ground, Shell said in a response to the Finance Ministry. Royal Dutch Shell Plc, meanwhile, put the development of the Linnorm gas field in the Norwegian Sea on hold. Statoil, Norway’s biggest company, in June decided to delay its Arctic Johan Castberg oil project, citing the tax change, shelving the $15 billion development. Oil companies have said the increase will be especially detrimental to increased-recovery projects at existing fields and marginal new developments. Norway is seeking to keep up production, which has slid for 13 consecutive years as deposits in the North Sea dwindle.Īs part of a plan to cut corporate taxes, Norway’s previous Labor-led government last year unexpectedly decided to reduce the part of investments that oil companies are allowed to deduct from income, while keeping the taxation level in the petroleum sector at 78 percent. Norway gets almost a quarter of its economic output from oil and gas and has built a $830 billion sovereign wealth fund. The criticism comes after Norwegian Petroleum and Energy Minister Tord Lien this month said he would seek to attract more companies to help develop the resources of western Europe’s largest oil producer as state-controlled Statoil cuts spending. Drilling programs valued at 80 billion kroner ($13 billion) “risk falling outside the transition scheme and thereby not being realized.” “It’s surprising and disappointing that the Finance Ministry proposes transition rules for the uplift reduction that will make increased recovery at producing fields more difficult,” the group said. The lobby represents producers including Statoil ASA, BP Plc, Exxon Mobil Corp. ![]() The Conservative-led government’s proposal to shield some projects from the previous administration’s surprise tax rise increase last year is too narrow and could allow retroactive increases, the Norwegian Oil and Gas Association said yesterday. 21 (Bloomberg) - Norwegian efforts to raise oil and gas recovery from its offshore fields are being jeopardized as higher taxes threaten $13 billion in planned drilling projects, according to an industry group. Shell’s Draugen platform and Prosafe’s Regalia flotel offshore Norway in 2013.
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