Statoil ASA (STL) said the government’s unexpected move to raise taxes on oil companies risks harming investments and casts doubt over the long-term predictability of the framework for offshore production.
The government yesterday said it will limit the so-called upflift on cash flow to 22 percent from 30 percent and raise the special petroleum tax to 51 percent from 50 percent, keeping a top tax rate of 78 percent. The increase will raise total taxes by about 3 billion kroner ($520 million) a year, the government said yesterday.
Statoil, which is 67 percent owned by the Norwegian state, said today that the changes will cut operating cash flow by below 500 million kroner this year and increase to full effect after four to five years. It will reduce tax deductions by 38 million kroner for 1 billion kroner invested, the Stavanger- based company said.
“The proposed change in the Norwegian petroleum tax reduces the attractiveness of future projects, particularly marginal fields, and raises questions regarding the predictability and stability of the fiscal framework for long-term investments on the Norwegian continental shelf,” said Torgrim Reitan, chief financial officer of Statoil, in a statement.
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