Potential oil boom in North Sea
Tax cuts agreed by Norway’s Stortinget may stimulate offshore production.
By Marc Allen, Maritime Direct UK.
According to Scandinavian bank, SEB, there may be an oil boom in 2021. Shippingwatch reports that despite higher carbon levies, tax cuts by Norway’s Stortinget are predicted to positively influence the industry and might lead to a new oil bonanza in the North Sea.
SEB analyst, Herman Lia, said: “For new projects to be covered by the temporary changes, PDOs (Plan for Development and Operation) must be submitted before the end of 2022 and approved by authorities before 2023. The temporary tax cuts could increase the currently [sic] value of the projects by around 25 per cent. This gives the oil companies large incentives to sanction new projects ahead of 2023.”
The most significant change to the Norwegian tax scheme is that companies can now write off costs in the petroleum tax-base immediately and not over six years as they had previously been allowed to do. Companies with strong ties to the Norwegian Shelf, such as Subsea 7, Aker Solutions, TechnipFMC and Odfjell Drilling could all stand to benefit from the changes.
