SHARE
COPY LINK

ENVIRONMENT

Norway to offer record number of Arctic oil and gas exploration licences

Norway on Tuesday said it plans to offer a record number of gas and oil exploration blocks in the Arctic, with environmental NGOs condemning an "aggressive" promotion of fossil fuels.

Pictured are two offshore oil platforms.
The Norwegian governemnt will offer exploration permission in "mature" zones. File photo photo: The oil platforms named Ellen (L) and Elly (R) are seen off the southern California coast. (Photo by Frederic J. Brown / AFP)

The Scandinavian nation — Europe’s primary natural gas supplier and a major oil producer — proposed 92 exploration blocks, including an unprecedented 78 in the Barents Sea in the far north. The other 14 are in the Norwegian Sea near the Arctic Circle.

“New discoveries remain necessary to continue to develop the Norwegian plateau” and are important for Europe, Oil and Energy Minister Terje Aasland said in a statement.

The announcement is part of the annual granting of oil licences in so-called “mature” zones that have already been widely explored. The centre-left government, lacking a parliamentary majority, reached an agreement with the Socialist Left party last year to forbid prospection in unexplored areas by 2025.

The government’s propositions sparked outrage among environmental organisations. Truls Gulowsen, head of the Norwegian branch of Friends of the Earth, condemned an “extremely aggressive” cycle of concessions presented as the United Nations and the International Energy Agency discourage further oil exploration to achieve climate goals.

The NGO said the proposal would violate the commitment not to explore virgin territory as some blocks were to be located far from existing infrastructure.

The right-wing opposition, a fervent defender of Norway’s oil sector, said the move was a “tactical game” by the government to give itself bargaining chips to use in future negotiations with the Socialist Left.

Oil industry body Offshore Norge welcomed the fact that “attractive areas” would be opened to prospection.

The proposals will go to a public consultation. Oil companies must submit their applications later this year and licences will be granted in January 2024.

The Barents Sea has long been seen as a productive area for the energy sector, but oil and gas extraction is so far only taking place at two sites in Norwegian waters.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

TAXES

Who will be affected by Norway’s new exit tax and how will it work?

Norway's government is moving forward with plans to enact stricter tax regulations for people leaving the country. The Local contacted the Ministry of Finance to find out the details.

Who will be affected by Norway's new exit tax and how will it work?

A new exit tax is in the works, the Norwegian government announced recently. 

READ MORE: What we know so far about Norway’s plans for an exit tax

The proposed changes aim to close loopholes within the existing tax system, particularly concerning the taxation of gains made on shares while residing in Norway and moving assets abroad.

Under the proposed regulations, those who have left Norway after March 20th, 2024, would be subject to taxes on gains of more than 500,000 kroner that they have accrued while in Norway. 

This move comes as part of the government’s efforts to address a recent outflow of wealth from the country, with Switzerland being a popular destination for tax exiles from Norway.

READ MORE: Why Norway has continued to see an exodus of wealthy residents

Who would be affected – and how would it work?

The new tax would affect both foreigners and locals – as long as they’re tax resident in the country, State Secretary Erlend Grimstad at the Ministry of Finance told The Local.

“The Norwegian exit tax rules, both the current ones and the ones being proposed, would affect natural persons who are tax residents in Norway,” he said.

The tax settlement process upon departure from Norway would require people to address their tax obligations related to gains exceeding 500,000 kroner on shares acquired during their time in Norway.

Emigrants would have several options for fulfilling this tax obligation, including immediate payment, interest-free instalments spread over 12 years, or deferred payment with accrued interest.

“Exit tax on shares will be imposed on individuals who terminate their tax residence in Norway, either according to Norwegian tax law or the applicable tax treaty.

“The rules also apply when an owner resident in Norway transfers shares as a gift to a person resident outside Norway,” Grimstad said, further noting that the new rules would only apply if the deemed net gain at the time of departure or transfer exceeded 500,000 kroner.

When could the new rules enter into force?

The consultation period for the new exit tax proposal began on March 20th and will last until May 21st, 2024. Thus, stakeholders and the public will have the opportunity to provide feedback and insights for the next two months.

Following this period, the proposal will undergo review and potential adoption by the Norwegian parliament (Storting), with the government needing majority support for implementation.

READ MORE: Does Norway really have some of the highest taxes in the world?

However, if the rules are passed, they will apply from March 20th, 2024, Grimstad told The Local.

“This is necessary to counteract tax adaptations in the time between publication of the proposal and adoption of the changes in the Storting,” he said.

The reasoning behind the new exit tax

Commenting on the exit tax developments last week, Norwegian Finance Minister Trygve Slagsvold Vedum said that it was important to uphold the principle of fairness in the taxation process, noting that people should contribute taxes on assets accumulated in Norway.

However, the proposed regulations also include provisions for those intending to return to Norway within the 12-year timeframe, ensuring that their tax liability would be adjusted accordingly.

“When you relocate, it’s only fair that you contribute taxes on what you’ve earned or gained in Norway. However, this process must be reasonable, hence the 12-year rule. Some people may wish to reside abroad temporarily and eventually return home,” Vedum said at the time, according to the Norwegian Broadcasting Corporation (NRK).

The proposed exit tax would extend beyond shares to include gains from share savings accounts and fund accounts. Additionally, transfers of shares with subsequent gains to people residing abroad, such as relatives, would trigger the tax if gains exceed 100,000 kroner, a reduction from the previous threshold of 500,000 kroner.

SHOW COMMENTS