BAHR
Solutions when jobs are on the line The oil price slump in March caused uncertainty about future investments on the Norwegian continental shelf. The supply industry was suddenly facing dramatic investment cuts compared with pre-covid-19 levels. Something had to be done. The market situation gave rise to considerable uncertainty regarding the development of new projects on the Norwegian continental shelf, since many of these would no longer meet oil companies’ required rate of return. This was especially dramatic for the Norwegian supply industry, which might rapidly find itself without work. In addition to the loss of a great many jobs, Norway risked losing key expertise needed to ensure proper management of oil and gas activities, including future decommissioning and removal. Besides, the Norwegian supply industry is a key factor in the development and construction of carbon capture, offshore wind and other green energy facilities. Norway could not afford to lose such a high-skill industry overnight.
thereby contribute to maintaining activity and expertise in the Norwegian supply industry, says Joachim M. Bjerke, BAHR Partner. However, the proposal needed to meet one key test: It was to entail no additional expenditure on the part of the State. This was not a matter of asking for tax reductions or any form of state aid package. The proposal had to be tax revenue neutral. BAHR’s team comprised of Joachim M. Bjerke, Jan B. Jansen and Marius Pilgaard accepted the challenge. – Over a few hectic days of working from home in close collaboration with Aker BP and other key persons, we came up with a proposal that eventually gained the support of the entire industry, as well as the Norwegian Confederation of Trade Unions and the Confederation of Norwegian Enterprise, says Bjerke. It was a great privilege to have the opportunity to work on such an exciting matter with so many high-calibre professionals.
– We were engaged to come up with a tax proposal for temporary
Immediate deduction of investment costs was the basic pillar The main challenge in explaining the proposal is that it needs to
petroleum taxation amendments to safeguard activity on the Norwegian continental shelf and
be understood in relation to how Norwegian petroleum taxation is structured, says Marius Pilgaard.
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