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Seadrill strikes deal after Svalbard tax haven flop
West Navigator, one of Seadrill's drillships. Photo: Seadrill

Seadrill strikes deal after Svalbard tax haven flop

Published: 08 May 2014 11:12 GMT+02:00
Updated: 08 May 2014 11:12 GMT+02:00

Seadrill, Fredriksen's oil rig company, has refused to pay the giant $263 million tax bill it was given by Norway's tax authorities in 2010 after the Svalbard plan was quashed. 
 
But on April 30, shortly before the company was due to fight the levy in court, it signed a secret deal with the government. 
 
"The tax administration cannot comment on this issue," the agency's press officer Arne Lutro told Norway's Dagens Næringsliv business paper. 
 
Seadrill relocated four of its oil rigs to a subsidiary registered in Svalbard at the end of the 2007-2008 financial year, making its main employee in Longyearbyen briefly Svalbard's biggest individual taxpayer. 
 
Svalbard had established a corporate tax rate of just 16 percent for large businesses in an attempt to lure companies to set up in the region.  Seadrill estimates that in 2007 alone, it saved $75 million from the move. 
 
But in 2010, when the ruse became public, the tax authorities moved to change the Svalbard tax regime, and Seadrill quickly closed down its Svalbard operations.  In 2011, the tax authorities hit Seadrill with the tax bill, which relates to capital gains it made during its time registered on the islands. 
 
Fredriksen is far and away the richest person of Norwegian origin, with Forbes Magazine estimating his fortune at $18bn. He became a citizen of Cyprus in 2006 for tax reasons. 

The Local (news@thelocal.no)

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