Norway governs upstream petroleum operations through a royalty/tax framework. On May 12, 2020, the government will submit a bill to the Storting to temporarily amend petroleum taxation. The stimulus, if implemented, would attempt to incentivise near-term investment in projects by reducing taxable profits for companies in the short-to-medium term. However, some members of industry have described the proposal as insufficient to maintain the current levels of activity. If investment (particularly in upcoming projects) is delayed due to company capital expenditure reductions and production cuts are implemented to help commodity prices recover, the country risks a production decline over the medium term.

“Norway Upstream Fiscal and Regulatory Guide”, presents the essential information relating to the terms which govern investment into Norway’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Norway’s upstream oil and gas investment climate.


Overview of current fiscal terms governing upstream oil and gas operations in Norway

Assessment of the current fiscal regime’s state take and attractiveness to investors

Charts illustrating the regime structure, and legal and institutional frameworks

Detail on legal framework and governing bodies administering the industry

Levels of upfront payments and taxation applicable to oil and gas production

Information on application of fiscal and regulatory terms to specific licenses

Outlook on future of fiscal and regulatory terms in Norway

Reasons to Buy

Understand the complex regulations and contractual requirements applicable to Norway’s upstream oil and gas sector

Evaluate factors determining profit levels in the industry

Identify potential regulatory issues facing investors in the country’s upstream sector

Utilize considered insight on future trends to inform decision-making

Table of Contents

1. Table of Contents

1.1. List of Tables

1.2. List of Figures

2. Executive Summary

2.1. Regime Overview – Royalty Tax Agreement

2.2. Timeline

2.3. State Take Assessment

3. Key Fiscal Terms

3.1. Royalties, Bonuses and Fees

3.1.1. Area Fees

3.1.2. Additional Fees

3.1.3. Royalties (Production Fees) – Abolished January 1, 2006

3.2. Abandonment and Decommissioning

3.3. Direct Taxation

3.3.1. Corporate Income Tax

3.3.2. Special Petroleum Tax

3.3.3. Norm Prices

3.3.4. Deductions and Depreciation

3.3.5. Uplift

3.3.6. Losses Carried Forward

3.3.7. Exploration Tax Loss Rebate

3.3.8. Withholding Tax

3.4. Indirect Taxation

3.4.1. Environmental Taxes

3.4.2. Value Added Tax

3.4.3. Customs Duties

3.5. State Participation

4. Regulation and Licensing

4.1. Legal Framework

4.1.1. Governing Law

4.1.2. Contract Type

4.1.3. Title to Hydrocarbons

4.2. Institutional Framework

4.2.1. Licensing Authority

4.2.2. Regulatory Agency

4.2.3. National Oil Company

4.3. Licensing Process

4.3.1. Licensing Rounds

4.3.2. License Applications

4.3.3. Award Criteria

4.4. License Terms

4.4.1. Duration and Relinquishments

4.4.2. Work Obligations

5. Appendix

5.1. References

5.2. Contact Us

5.3. Disclaimer

List of Tables

1.1. List of Tables

Table 1: Regime Overview

Table 2: Norway, Key Events since 2000

Table 3: Norway, Area Fees (NOK/km2), 2007 Onwards

Table 4: Norway, Area Fees (NOK/km2), 1965–2006

Table 5: Norway, Liquid Royalty Rates, 1972–2005

Table 6: Norway, Corporate Income Tax Rates (%), 1965–2019

Table 7: Norway, Special Petroleum Tax Rates (%), 1975–2019

Table 8: Norway, Uplift, 1992–2019

Table 9: Norway, Interest Rate on Losses Carried Forward (%), 2003–2020

Table 10: Norway, Environmental Taxes, 2015-2020

Table 11: References

List of Figures

1.2. List of Figures

Figure 1: Regime Flow Chart

Figure 2: Norway, Indicative NPV10/boe, IRR and State Take Comparison, and Price and Cost Sensitivity Analysis

Figure 3: Norway, Legal Framework

Figure 4: Norway, Institutional Framework


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