Norwegian Budget Will Result in No Change to Oil, Gas Firms' Tax Burden
Norway's Budget, announced this week, will result in no change to the overall tax burden on oil and gas companies.
The Norwegian government has proposed to cut the country's corporation tax to 25 percent from 27 percent, while raising its special petroleum tax to 53 percent from 51 percent. Analysts at London-based investment bank FirstEnergy noted Friday that this would result in no change to the overall tax burden of 78-percent on oil and gas producers.
However, Norway's government believes that the measure will help producers because of the base for the corporation tax is wider than that for the special petroleum tax, according to Petroleum and Energy Minister Tord Lien when interviewed by Bloomberg on Thursday.
Norway said while it still expects contracts to be awarded for development projects that remain profitable at a low oil price, such as the Johan Sverdrup field.
"Further petroleum investment decline is anticipated for the next two years, but such a decline is likely to be less than this year," it said in its Budget 2016 report.
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