The Norwegian Petroleum Directorate (NPD) has launched a consultation for a planned 18.02 percent increase in area fees for production licenses.
The increase applies each to 1997 rates of $3,620 (NOK 38,000) per 0.39 square mile (one square kilometer) in the first year, $7,230 (NOK 76,000) per 0.39 square mile in the second year and $14,560 (0.009153.009 NOK) per square. mile in subsequent years.
“The basis for the adjustment is Statistics Norway’s (SSB) consumer price index,” the NPD said on Tuesday.
The royal decree of 1997 specifying the rates allows for revision every five years.
If the changes go ahead, rates for 2024 will be $3,620 to $4,280 (NOK 38,000 to NOK 45,000) per 0.39 square mile. By 2025, the rate rises to $7,239–$8,570 (NOK 76,000–NOK 90,000) per 0.39 square mile. The rate for 2026 and subsequent years would be $14,560 to $17,230 (between NOK 153,000 and NOK 181,000) per 0.39 square mile.
The regulator is accepting comments until August 1.
The NPD opened the 2023 licensing round for oil production on the Norwegian continental shelf last month.
High energy prices
The amendment would give the Norwegian state a bigger share of the fat energy profits that boosted commodity prices after Russia’s invasion of Ukraine in February 2022.
Norway recorded oil revenues of $138.69 billion (NOK 1.457 trillion) last year, the highest since official statistics began.
“Through the ordinary tax and the special tax on oil companies, the state collected an estimated NOK 884 billion [$84.15 billion]which is almost triple compared to 2021,” Statistics Norway reported on March 6.
“Revenues from the state’s direct ownership of oil and gas fields, pipelines and onshore facilities, known as SDFI, were also historically high in 2022. SDFI’s operating surplus was approximately 530,000 NOK million. [$50.45 billion]. The corresponding figure for 2021 was 182 billion.”
Majority state-owned Equinor ASA raised net income of $28.744 billion for 2022, up more than 100% from 2021.
“Increased gas production coupled with the realization of high gas prices drove unusually high earnings in 2022,” he said in an earnings report on Feb. 8.
“Taxes of $14.188 billion, paid in the fourth quarter of 2022, continue to reflect increased NCS [Norwegian continental shelf] earnings for the year relative to the previous year,” Equinor said. “Two installments of Norwegian corporate tax were paid in the quarter, totaling $13.6 billion (NOK 140 billion). NCS tax breaks totaling NOK 162 billion [$15.42 billion] It is expected to be paid in the first half of 2023.”
International benchmark Brent crude reached its highest annual average in 2022 at $100.93 a barrel, while global natural gas standard Henry Hub averaged $6.45 per million thermal unit Britain, the largest distribution center in the United States since 2008, according to the US Energy Information Administration.
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