Norway’s fiscal stability comes under strain

The country faces challenges to the much-vaunted tax regime certainty on which it has built exploration success

Norway's 78pc tax rate on income from hydrocarbon production is steep by international standards. But the country has always stressed the stability of its fiscal regime and its balance and neutrality—where the government shares a significant amount of the risk in return for its big take on the reward and the drill/no-drill decision is not impacted by tax concerns-as attractive to explorers. That stability and neutrality is now coming under increased strain. In part, the pressure is from a more aggressive Norwegian environmental lobby, which is targeting specific elements of the tax code to further its agenda of reducing activity on the Norwegian continental shelf (NCS). But elements within t