Statoil: Proposed Tax Change Threat to Projects
Statoil has warned that a proposed change to tax breaks for investors on the Norwegian Continental Shelf threatens the attractiveness of future projects.
Norway is proposing to reduce the uplift in its petroleum tax system from 7.5 percent to 5.5 percent, which according to a Statoil statement Monday would reduce tax deductions on NCS projects by $38 million for every $1 billion invested.
Statoil said that a predictable and stable fiscal framework is important to secure the attractiveness of continued investment in the NCS.
"The proposed change in the Norwegian petroleum tax reduces the attractiveness of future projects, particularly marginal fields, and raises questions regarding the predictability and stability of the fiscal framework for long-term investments on the Norwegian continental shelf," Statoil CFO Torgrim Reitan said in a statement.
The proposed change is to be included in Norway's Revised National Budget 2013, which will be announced Tuesday.
The reduction in the uplift was designed to bring offshore investment in line with onshore investment in the country, an aide to Norway's Minister of Petroleum and Energy, Ola Borten Moe, currently attending the Offshore Technology Conference show in Houston, told Rigzone Monday.
The Norwegian government has also proposed a transition rule for projects where the Ministry of Petroleum and Energy has received a plan for development and operation (PDO), or a plan for installation and operation (PIO), prior to May 5. For investments covered by this transition rule, the current uplift of 7.5 percent will still apply.
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