Norway’s oil and gas tax revenue triples to record $89.3 billion

Norway’s estimated tax revenue from its oil and gas industry rose to a record 884 billion Norwegian crowns ($89.3 billion) in 2022 — up by 200 percent.

According to a statement by the Norwegian tax administration on Thursday, the revenue is almost three times the previous record.

“The figures also imply a tripling of the petroleum tax from the previous peak year of 2021,” it said.

The agency said Norway’s previous annual tax record for the oil and gas industry was NOK295 billion in 2021.

The tax authority said it had previously estimated that oil and gas taxes for 2022 would amount to NOK739 billion, but new data from oil companies had led to an upward revision.

As a result, government income in Norway, a major oil producer, has soared as energy prices have been driven higher by Russia’s war on Ukraine, it said.

According to the statement, energy companies have so far paid NOK502 billion of last year’s tax bill, while NOK382 billion remains to be paid in three instalments during the first half of 2023.

In addition to tax payments, the government also earns income from dividends paid by state-owned Equinor and from the earnings of Petoro, a state-run company holding stakes in many of Norway’s largest oil and gas field, it said. 

Nina Schanke Funnemark, director-general, Norwegian tax administration, said: “The main explanation is the very high price of gas.” 

“The low exchange rate of the crowns also contributes to the high futures tax, as oil and gas from the Norwegian continental shelf are mainly sold in foreign currency.”

Norway is the fifth largest oil exporter in the world, with a daily production capacity of 2.4 million barrels, which is the same level of output as Nigeria.

While Nigeria is the largest oil producer in Africa and the sixth largest exporter in the world, oil theft, and huge subsidy payments continue to deprive the country of gains from its energy sector.

With production seen rising, the Nigerian National Petroleum Company (NNPC) Limited says in 2023, oil output may average 2.2 million barrels per day (bpd), including condensate — a projection that could see it surpass its target set by the Organisation of Petroleum Exporting Countries (OPEC).