Norway expects to earn a record $131 billion from oil and gas in 2023

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Norway’s government expects record revenues next year from its oil and gas industry, it said on Thursday, forecasting an 18% increase from this year’s level and a fivefold increase from 2021 as production increases and prices soar.

Gas prices in Europe have roughly tripled in 2022 following cuts in supplies from Russia before and after its invasion of neighboring Ukraine, and the price has risen tenfold from levels seen before last year. .

Norway, Europe’s largest gas supplier and the world’s largest crude producer, plans to pump 4.3 million barrels of oil equivalent per day next year, up from 4.1 million barrels expected in 2022 and to ensure significant financial gains from soaring energy prices.

Norway’s finance ministry, in its draft budget for 2023, said oil and gas revenues next year are expected to reach a record 1.38 trillion kroner ($131 billion), from 1.17 billion crowns in 2022 and 288 billion crowns in 2021.

While the nation of 5.4 million said soaring gas prices were not in its long-term interest, it rejected calls for a price cap, arguing it would not help Europe to get more energy.

TAX INCREASE

Due to rising prices, the government plans to raise taxes on the country’s oil and gas industry by 2 billion crowns in 2023 by partially reversing an incentive package introduced during the coronavirus pandemic.

The proposal reduces the so-called rate of increase, a special tax deduction, from 17.69% to 12.4%.

The decision is also part of a broader initiative by the left-wing minority government to raise taxes on businesses that use the country’s natural resources, including electricity generators and fish farms, and to tackle the galloping inflation.

In an effort to cool the economy and help bring down inflation, the coalition of Labor and the rural-oriented Center Party said it planned to cut spending in 2023 of the sovereign wealth fund by $1.2 trillion. dollars, the largest in the world.

The government has proposed withdrawing 316.8 billion crowns from the wealth fund next year, up from a revised 335.1 billion crowns in 2022. It now has to negotiate with the Socialist Left Party in parliament to pass the budget.

Gross domestic product of the non-oil economy is expected to grow 2.9 percent this year, declining to 1.7 percent in 2023 before rebounding to 2.0 percent in 2024, the ministry said. ($1 = 10.5367 Norwegian kroner) (Reporting by Terje Solsvik and Nerijus Adomaitis in Oslo, additional reporting by Nora Buli, editing by Jason Neely and Elaine Hardcastle)

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