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Norway raises oil taxation for the first time in 20 years

07 May 2013

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07 May 2013

Norway raises oil taxation for the first time in 20 years

Report summary

On 5 May 2013, the Norwegian Government announced a proposal to reduce the capital uplift in the petroleum tax system from 30% to 22%, with immediate effect. The proposal includes a reduction in corporation tax from 28% to 27% and an increase in special petroleum tax from 50% to 51%, leaving the marginal rate of tax unchanged at 78%. This will be effective from 1 January 2014. The changes were a surprise, especially given Norway's reputation for fiscal stability.

Executive Summary
Proposed changes
- Transition terms
The impact on new field developments
The impact on companies
The rationale for change
Economic Assumptions
- Discount rate and date
- Inflation rate
- Oil price
- Gas Price
- Wood Mackenzie assumes the average annualised gas price in nominal terms is US$9.98/mcf in 2013, US$10.20/mcf in 2014, US$10.48/mcf in 2015, US$10.23/mcf in 2016, US$9.82/mcf in 2017 and US$9.29/mcf in 2018, escalating at 2% per annum from the beginning of 2019 onwards. These prices refer to gas with a calorific value of 40MJ/m3.
- Exchange Rate