Norway is giving a tax relief to its oil industry

Despite the crisis caused by the coronavirus, investments in the oil and gas industry in Norway are expected to increase by 1.6 percent this year compared to 2019. This is thanks to higher oil prices and the government's tax relief package for the oil industry, according to the latest investment survey by Norwegian statistics agency Statistics Norway on Thursday. Total investment in oil and gas activities in Norway in 2020, including pipeline transportation, is estimated at US $ 20.57 billion (NOK 184.6 billion), an increase of 2.4 percent from the last estimate May 2020 survey. Compared to the corresponding figure for 2019, oil and gas investments in Norway are now expected to increase by 1.6 percent, according to the August survey. For 2021, investments will decline from the current estimated level of 2020, but the estimate for next year is now 2.1 percent higher than in the May survey, according to Statistics Norway. Following the collapse in oil prices, Norway adopted a package of measures in late April to support the oil and gas industry and the supply chain, including temporary changes to the tax system, to help companies maintain liquidity and continue their planned projects. "To encourage activity and safeguard jobs in this difficult situation, we are proposing some temporary changes. In practice, these will mean deferring tax bills and improving corporate liquidity. This will enable oil and gas companies to make more investments, "said Finance Minister Jan Tore Sanner at the time. According to estimates by Rystad Energy, the temporary tax relief package for the oil industry is intended to improve the short-term liquidity of the exploration and production companies and to lower the break-even prices for future development projects by an average of 40 percent. The support package will also help to ensure that demand in Norway increases in 2020 under harsh environmental conditions and remains at a stable level in the coming years.