Quantcast
Friday , November 17 2017
Breaking News
Home / International Customs / Norway plans tax breaks for remotest Arctic oilfields
Norway plans tax breaks for remotest Arctic oilfields

Norway plans tax breaks for remotest Arctic oilfields

OSLO: Norway’s government plans to make taxpayers rather than oil companies pay special U.N. fees for any offshore production from remote Arctic regions, according to letters sent to oil firms and seen by Reuters.

The plan could serve as an example for other nations looking to fund exploration of the seabed ever further from land.

It was criticized by opposition parties that want tighter limits on exploration in the fragile Arctic environment, days before an election in which the future of Norway’s big offshore oil and gas sector is a major issue.

Opinion polls show a neck-and-neck race between Conservative Prime Minister Erna Solberg’s center-right block and center-left parties headed by Labour leader Jonas Gahr Stoere.

“There is too little risk on the companies, and too much risk on the people of Norway,” said Ola Elvestuen, the head of parliament’s Energy and Environment committee and a member of the small Liberal Party.

“Neither me, nor the committee were informed about this,” he said of the plans, outlined in letters provided to Reuters by the Oil and Energy Ministry, for implementing a dormant provision of the 1982 U.N. Convention on the Law of the Sea.

Under Article 82 of the treaty, rich nations are due to pay up to 7 percent a year of the value of any production — of oil, gas or other minerals — from their continental shelves more than 200 nautical miles (370 km) from land to a fund to help developing nations.

The money would be channeled to poor nations via the United Nations’ International Seabed Authority in Jamaica. The mechanism is untested as there is no production so far offshore.

The Oil and Energy Ministry included a warning about Article 82 when it offered parts of the Arctic Barents Sea, more than 200 nautical miles from land, for exploration in the latest licensing round awarded in 2016.

“The licensees could be required to cover certain costs in this connection,” it wrote in the letters to oil companies. “Any such cost will be deductible in the calculation of the petroleum tax.”