Letter from Norway: Tax stimulus medicine gets to work

New legislation aids the country in reaching peak hydrocarbon production. But increased interest in renewables still poses stranded resources risk

The second week of March was characterised, in Norway as in the rest of Europe, by pandemic fear, strict restrictions and great uncertainty about short-term oil and gas output. It did not take long for E&P companies to start reducing activity and cutting budgets drastically, a worrying sign that bankruptcies and job layoffs were next. But in Norway, rather than contracting a lethal dose of pandemic paralysis, the oil and gas industry instead took some medicine to ride out the storm. The industry, its unions and politicians worked together and, just three months later in early June, unveiled a tax stimulus package for increased investment in oil and gas. The new tax incentive will signifi