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Denmark's proposed tax hike hits IOC value

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22 March 2013

Denmark's proposed tax hike hits IOC value

Report summary

On 1 March 2013, the Danish Ministry of Taxation announced a proposal to overhaul the fiscal terms of older licences. We estimate the proposed changes would result in a net reduction in remaining IOC value of US$1.47 billion (DKr8.69 billion). The main proposal is to reduce the rate of hydrocarbon tax from 70% to 52%, but also to reduce the hydrocarbon tax allowances from 250% of capex, to 30%. This would result in drastically increased hydrocarbon tax bills for those fields affected.

Table of contents

  • Executive Summary
  • Background to the proposal
    • Hydrocarbon tax rate and allowances
    • Transition Period
    • Other changes to the licence terms
    • The impact
    • Illustrating the impact
    • Economic Assumptions
      • Discount rate and date
      • Inflation rate
      • Oil price
      • NGL Price
      • Gas Price
      • Exchange Rate

Tables and charts

This report includes 7 images and tables including:

  • Fields affected by the proposed changes
  • Asset impact of proposed changes (US$m)
  • Corporate impact of proposed changes (US$m)
  • Hejre cash flow on the current terms
  • Hejre cash flow on the proposed terms
  • South Arne cash flow on the current terms
  • South Arne cash flow on the proposed terms

What's included

This report contains:

  • Document

    Denmark's proposed tax hike hits IOC value

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