news has asked Equinor to find out what the provisional oil tax package, which the politicians introduced during the pandemic, meant for the tax bill last year. In the spring of the 2020 pandemic, oil prices plunged, but the crisis package was supposed to reduce the risk in new projects and ensure activity. But the package was criticized, among other things because the environmental movement believes it gives a competitive advantage to the oil industry, at the expense of green industries. 2.5 per thousand The answer from Equinor now is that the bill cut the tax by a quarter of a percent. – She makes around NOK 1.2 billion, which is naturally a large number. But compared to the 477 billion that make up the tax bill, it amounts to 2.5 per thousand, says Torgrim Reitan. He is CFO at Equinor. The sky-high income makes the tax deduction of 1.2 billion seem small, compared to how much tax was paid from the oil operations on the Norwegian continental shelf. Torgrim Reitan is CFO at Equinor. Photo: Ole Jørgen Bratland The 477 billion are payments from operations on the Norwegian continental shelf for 2022, which will be paid both in 2022 and in the first half of 2023. Due to super profits in the oil and gas industry, the oil and gas industry pays 78 percent tax, in instead of 22 per cent like most other industries. The debate is raging At the same time, the industry is allowed to deduct costs from the tax, such as exploration and production. The effect of the sky-high tax rate is clearly visible in the accounts from last year. At the time, prices for North Sea oil, and especially natural gas, were very high. With the exception of Saudi Arabia’s state-dominated oil company, Saudi Aramco, Equinor’s tax bill last year was higher than for any other listed company in the world in the last 50 years. Nordea’s investment director Robert Næss says so on Twitter. – The enormous tax payments we had last year are so high that it is probably true, says Torgrim Reitan. At the same time, the public debate is raging about how big a subsidiary the industry will get. The finance director doesn’t quite recognize himself. – When we pay a tax of NOK 477 billion, that is not exactly the word I would use for this industry, he says. Negative bottom line The mid-Belgian oil tax package came into place during the pandemic, in the summer of 2020. The price of oil plunged to 20 dollars in April and the politicians feared a sudden brake on the industry. This could lead to high unemployment in the supplier industry. Equinor had a negative bottom line. The strong incomes in the industry show that the oil tax package was clearly wrong, and should be changed retroactively, believes incoming leader Kirsti Bergstø of the Socialist Left Party. She says so, even though the provisional arrangement has now ended, and only applies to projects that were approved before the turn of the year. – It is possible to make changes to the tax policy in every single state budget, and it is also possible to take over the situation we are in now, which is completely different from when the oil tax package came into place, she says. Kirsti Bergstø is, by all accounts, the next leader of the Socialist Left Party. Photo: Trond Lydersen / news Oil tax package 30 oil and gas developments get tax breaks 30 oil and gas developments totaling around NOK 400 billion will get the favorable tax conditions from the oil tax package that was introduced during the pandemic. In June 2020, the Storting adopted temporary changes to the oil tax in 2020 to ensure activity in the corona era. Now, figures Teknisk Ukeblad has received from the Ministry of Oil and Energy show that 30 oil and gas developments have submitted plans for development and operation that fall under the temporary tax regime before the deadline that expired at the turn of the year. The projects contain just under 2.7 billion barrels of oil and gas. In addition, there are a couple of projects that will cut CO2 emissions. The Ministry of Finance estimates that the tax package will cost the state NOK 11 billion extra as a result of the temporary tax benefits, but the estimate has not been updated after the deadline for submitting new development plans expired. (NTB) – Not very controversial 3/4 of the shares in Equinor are owned by the state and other private Norwegian owners, such as Norwegian mutual funds. 1/4 is owned from abroad. – Changing the policy for an industry when the situation changes is not very controversial. You cannot stand back and see that something went wrong without taking action. Looking at how to make adjustments now should be in everyone’s interest, says Bergstø. She says that you cannot stand back and see that things have been done wrong, without taking action. At the same time, the constitution has rules that laws should not have retroactive effect. – Must keep one’s fingers out of the barrel Future certainty is very important for how people choose to invest in business, and Norway has historically been known as a country with stable framework conditions over time. Senior manager Erna Solberg has previously come out and said that the mid-Belgian oil tax package was too generous, and the head of Aker BP has said the same to news. The Storting changed the oil tax last year, to a so-called cash flow tax. There you get an immediate deduction for investments. Energy policy spokesperson Ove Trellevik in Høgre Photo: Olaug Spissøy Kyvik Tax policy must now be fixed, says Energy policy spokesperson Ove Trellevik in Høgre. – We have to keep our fingers crossed once we have decided that he will be there. This is in no way a subsidized industry, they pay 78 per cent tax. If someone thinks that the oil industry is subsidized, I think they need to go home and do the math again, he says.
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Maligned oil tax package meant little for Equinor’s tax bill – news Norway – Overview of news from different parts of the country
