Norway tax change: an in-depth view

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Executive Summary

In June 2020, the Norwegian government passed a temporary change to its fiscal terms. The new incentives have been implemented to encourage development activity on the Norwegian shelf in the wake of the oil price crash and coronavirus pandemic.

Powered by our Lens platform, this insight considers what effects these changes have had on project value, company cash flow, development timelines, the M&A market and Norway's competitiveness in a global context.

So, what has changed?

  • Investment: we estimate over US$3 billion has already been brought forward into the new tax window
  • Cash flow: total net cash flow has increased by US$10 billion to 2021
  • Projects: Norway's average breakeven for pre-FID projects is now US$10/bbl lower than the global average
  • M&A: consolidation is on the cards as companies look to take full advantage of the terms and increase exposure to development assets

Our views on investment, valuations, cash flow and projects will continue to be updated weekly in Lens Upstream, and quarterly via Upstream Data Tool (UDT) and Global Economic Model (GEM).

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