Fonte/Source, Bloomberg, (Bloomberg) — Norway’s government rebuffed pleas to cut oil taxes amid plunging crude prices, calling on the nation’s largest industry to cut costs to weather the slump.
“We don’t think you should answer lower oil prices by changing the tax system,” Prime Minister Erna Solberg said Wednesday at the Oslo Energy Forum, a conference attended by top executives from Statoil ASA, Royal Dutch Shell Plc and BP Plc among others. “One of the really good things in Norway has been the stability in our systems.”
The Conservative-led government is still considering tax incentives for marginal projects and increased-recovery efforts at mature offshore fields, though no such measures are planned in “the short term,” she said in an interview.
Norway, which gets more than a fifth of its economic output from oil and gas production, is losing both tax income and jobs as companies including Statoil cut investments after the price of crude tumbled by 60 percent from June to January. Oil companies in the country are preparing to cut investment by 15 percent this year.
The government has said it’s “on alert” and will take stimulus measures for the economy if necessary. That time hasn’t come yet, Solberg said.
“For now, there are no strong indicators among those things that would be parameters for action, such as significantly higher unemployment,” she said in the interview. “But we are very clear that we need to be careful as we go through an adjustment to other activities that there should be an adjustment to new jobs, and that people don’t adjust to being permanently outside the labor market.”
The uncertainty that’s reached Norway’s oil industry isn’t only due to falling prices, Solberg said, reiterating that cutting costs is primarily the oil companies’ responsibility. The government’s contribution will be to continue awarding new exploration acreage at a steady pace and maintaining a stable and predictable framework for the oil industry, she said.
The salary level in Norway’s oil industry, which has ranked among the top two in the world for the five last years, according to recruiter Hays Inc., is due in part to a lack of manpower as investments grew in the past decade, Solberg said.
“That might change now,” she said.
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