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Norway’s PM promises to keep looking for oil 'as long as it is profitable'

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Norway’s PM promises to keep looking for oil 'as long as it is profitable'
A file photo showing a North Sea oil platform off the coast of Scotland. Photo: AFP
19:50 CEST+02:00
Prime Minister Erna Solberg says demand is key in considerations of how Norway will approach gas and oil extraction in future.

Solberg was responding to increased focus within her own Conservative (Høyre) party on the government’s approach to the oil industry, including taxation, as it seeks to form a strategy heading towards the 2021 election.

The youth wing of the Conservatives – Unge Høyre – has also called for a “prejudice-free” discussion of a reimbursement system [Norwegian: leterefusjonsordningen, ed.] by which the state covers 78 percent of the cost of a company’s oil exploration, provided it results in a profit for the company, NRK reports.

Solberg told the broadcaster that she supports a stable framework for the oil industry and that the exploration subsidy – which is effectively a reimbursement of the tax value of explorations costs – is key to that.

You can read more about the Norwegian tax regime for petroleum exploration here.

“(The reimbursement system) is well-justified with regards to the variety of companies, such that new technology is developed,” Solberg said to NRK.

The scheme has also acted as an incentive for oil companies to invest in exploration in Norway.

The PM added she supports continuing to explore in new areas provided there is demand and profit in the oil market.

“It is profitability which will determine whether we will expand oil and gas (industry) in future,” she said.

Conservative MP Lene Westgaard-Halle, who also supports the reimbursement system, said a discussion of how to update taxation of the oil industry was necessary, but that climate was not the primary factor.

“This is not primarily about climate, but about being economically viable when oil changes and the price of oil changes,” Westgaard-Halle told NRK.

“We are going to have oil for many years to come, whether you like it or not, but we must prepare for a scaling-down because we are seeing huge cuts on the consumer side,” she added.

READ ALSO: Critics blast Norwegian budget for 'small change' measures on climate

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