Norway jacks up oil and gas tax, citing soaring prices

Norway will increase taxation on the oil and gas industry by an estimated 2bn kroner ($260mn) next year, partly by rolling back a previous incentive package introduced at the height of the coronavirus pandemic.

In a statement, the finance ministry said on October 6 it had decided to increase taxes as a result of soaring oil and gas prices.

'When aggregated over the years in which the temporary rules will apply, central government revenues are estimated to increase by 11bn kroner," finance minister Trygve Slagsvold Vedum commented.

Norway produces 4mn barrels of oil equivalent/day and is now the biggest gas exporter to Europe, due to steep reductions in Russian flow since Moscow began its war in Ukraine.

"With the government's proposal, all profitable investments before special tax will also remain profitable after tax," Vedum said.

The tax incentive package passed by Norway's parliament in June 2020 was valued at 100bn kroner ($10bn) at the time. It was aimed at encouraging producers to continue investing in spite of low prices that year. A number of operators have cited the support as a key factor in decisions to go ahead with new development projects.