Norwegian Petroleum Industry Seeks Tax Changes
|Thursday, August 28, 2003
Recommendations on securing future value creation and good resource management on the Norwegian continental shelf (NCS) are contained in two reports published today, August 28th.
Drawn up by the Kon-Kraft industrial collaboration to cover tax and activity respectively, these documents have been submitted to petroleum and energy minister Einar Steensnaes. A high level of taxation and lack of prospective exploration acreage are identified as important reasons for a decline in the level of activity on the NCS.
This downturn is happening despite the fact that substantial petroleum resources are thought to remain off Norway.
Kon-Kraft serves as the secretariat for the government-backed Top Executive Forum, which embraces most Norwegian offshore players.
The challenges facing the industry and the country in the petroleum sector were spelt out in a government White Paper presented in 2002.
This concluded that taking the right action today could create NOK 2,000-4,000 billion in additional value for the Norwegian community by 2050.
The urgent need for attractive new exploration acreage is one important finding of the activity project, which has been headed by Statoil's Alv Bjorn Solheim.
"Exploration activity is at a historical nadir," he observes. "A total of 15 exploration and appraisal wells is forecast for 2003 – lower than at any time since the early 1970s." The report adds that the industry must work to reduce its costs in collaboration with the authorities and other interests.
"Reducing costs and improving frame conditions will allow us to develop smaller fields and maintain profitable operation in the tail production phase," Mr. Solheim notes. The petroleum and energy ministry has indicated that the conclusions in the activity project will be a principal theme in a petroleum White Paper planned for next year.