natgillin/translations-raw huggingface dataset:
Let me underline that in all public consultations, this implies consultation both with other relevant Ministries and Governmental bodies – as well as any interested party.
Let me underline that in all public consultations, this implies consultation both with other relevant Ministries and Governmental bodies – as well as any interested party.
Stepwise opening of new areas
Stepwise opening of new areas
No petroleum activity is allowed until an area has been formally opened for petroleum activities.
No petroleum activity is allowed until an area has been formally opened for petroleum activities.
We have gradually and prudently opened up new areas for petroleum activity since 1965.
We have gradually and prudently opened up new areas for petroleum activity since 1965.
First we opened up in the southern parts of the North Sea, and then we have gradually moved north and opened up new areas for petroleum activity in the Norwegian Sea and Barents Sea.
First we opened up in the southern parts of the North Sea, and then we have gradually moved north and opened up new areas for petroleum activity in the Norwegian Sea and Barents Sea.
Last time the Parliament decided upon opening a new area was in 1994.
Last time the Parliament decided upon opening a new area was in 1994.
Opening up new areas have been done stepwise.
Opening up new areas have been done stepwise.
At present, we have two opening processes ongoing:
At present, we have two opening processes ongoing:
Recently, the Government recommended an opening of the South-eastern parts of the Barents Sea.
Recently, the Government recommended an opening of the South-eastern parts of the Barents Sea.
This was made possible following a Norwegian-Russian delimitation agreement in 2010.
This was made possible following a Norwegian-Russian delimitation agreement in 2010.
The government is also working on opening up the area around the island of Jan Mayen in the Norwegian Sea.
The government is also working on opening up the area around the island of Jan Mayen in the Norwegian Sea.
By doing it this way, we gain geological knowledge, experience and technological developments before we move into new areas.
By doing it this way, we gain geological knowledge, experience and technological developments before we move into new areas.
The Norwegian licensing system
The Norwegian licensing system
A few words about our licensing system:
A few words about our licensing system:
The Norwegian licensing system is not a system based on auctions, but a discretionary system.
The Norwegian licensing system is not a system based on auctions, but a discretionary system.
We use the oil companies as “agents” to create values within our framework.
We use the oil companies as “agents” to create values within our framework.
As is the case in our opening processes, stepwise opening of areas and exploration are keywords in our licensing system.
As is the case in our opening processes, stepwise opening of areas and exploration are keywords in our licensing system.
We have two different licensing rounds.
We have two different licensing rounds.
In frontier areas – where stepwise exploration is important – we use so-called numbered rounds.
In frontier areas – where stepwise exploration is important – we use so-called numbered rounds.
Now, we are working with the 22. licensing round.
Now, we are working with the 22. licensing round.
In mature areas – where the geology is well-known – we use yearly Awards in Predefined Areas, the so-called APA rounds.
In mature areas – where the geology is well-known – we use yearly Awards in Predefined Areas, the so-called APA rounds.
In mature areas there is no need to use stepwise exploration, as geology is assumed to be well-known.
In mature areas there is no need to use stepwise exploration, as geology is assumed to be well-known.
In these areas it is important to find and produce the resources before existing infrastructure shuts down.
In these areas it is important to find and produce the resources before existing infrastructure shuts down.
Before a numbered round is announced, there is a process of nomination.
Before a numbered round is announced, there is a process of nomination.
In this process, oil companies nominate blocks they find interesting.
In this process, oil companies nominate blocks they find interesting.
We do an evaluation of the nominations and based on this – and on our own evaluation – we suggest an announcement of blocks.
We do an evaluation of the nominations and based on this – and on our own evaluation – we suggest an announcement of blocks.
This is then subject to a public hearing, before the government makes its decision about which blocks the companies may apply for.
This is then subject to a public hearing, before the government makes its decision about which blocks the companies may apply for.
Based on applications from single companies or a group of companies the authorities award production licenses to groups of companies.
Based on applications from single companies or a group of companies the authorities award production licenses to groups of companies.
A production license confers an exclusive right to exploration for petroleum, exploration drilling and production of petroleum within the license area
A production license confers an exclusive right to exploration for petroleum, exploration drilling and production of petroleum within the license area
The licensee becomes the owner of his proportionate share of the petroleum produced.
The licensee becomes the owner of his proportionate share of the petroleum produced.
Licencing policy – Compete & Cooperate
Licencing policy – Compete & Cooperate
The award of production licenses is based on
The award of production licenses is based on
· geological understanding
· geological understanding
· technical expertise
· technical expertise
· financial strength
· financial strength
· experience with the oil company
· experience with the oil company
Oil companies compete to be awarded license.
Oil companies compete to be awarded license.
Awards are on non-discriminatory basis.
Awards are on non-discriminatory basis.
We do not discriminate between Norwegian or foreign companies.
We do not discriminate between Norwegian or foreign companies.
We award to the companies with the best applications, provided that the company fulfils the requirements.
We award to the companies with the best applications, provided that the company fulfils the requirements.
This is a system which has proven very successful.
This is a system which has proven very successful.
It is important with a plurality of ideas and internal checks and balances in a production license.
It is important with a plurality of ideas and internal checks and balances in a production license.
Therefore we award a licence to a group of companies, and we make sure that each company has a real influence in the license.
Therefore we award a licence to a group of companies, and we make sure that each company has a real influence in the license.
We want the joint venture to maximize the value in the production license.
We want the joint venture to maximize the value in the production license.
Risk, cost and profit is shared between the licensees (including the State) in accordance with their participating interest in the joint venture.
Risk, cost and profit is shared between the licensees (including the State) in accordance with their participating interest in the joint venture.
As mentioned, the State participates through the State’s Direct Financial Interest.
As mentioned, the State participates through the State’s Direct Financial Interest.
Government cash flow from the petroleum industry
Government cash flow from the petroleum industry
The state receives cash flow from the petroleum industry from several sources.
The state receives cash flow from the petroleum industry from several sources.
However, there are two main sources of capturing the economic rent: Taxes and the State’s Direct Financial Interest (SDFI).
However, there are two main sources of capturing the economic rent: Taxes and the State’s Direct Financial Interest (SDFI).
As you can see, the dividend from Statoil is not a major source of income, but Statoil is of course taxed.
As you can see, the dividend from Statoil is not a major source of income, but Statoil is of course taxed.
There is also some income from environmental taxes and area fees, but they are relatively small.
There is also some income from environmental taxes and area fees, but they are relatively small.
Norwegian Petroleum Tax System
Norwegian Petroleum Tax System
Let me give you a couple of comments on our tax system.
Let me give you a couple of comments on our tax system.
There is an extraordinary return by production of the natural resources.
There is an extraordinary return by production of the natural resources.
Hence, the government as resource owner should capture its economic rent by taxing the oil companies.
Hence, the government as resource owner should capture its economic rent by taxing the oil companies.
That is why we have a special tax rate at 50 percent in addition to the normal corporate tax rate of 28 percent.
That is why we have a special tax rate at 50 percent in addition to the normal corporate tax rate of 28 percent.
The income of the companies is calculated based on a norm price, which the Ministry sets for the different qualities of oil.
The income of the companies is calculated based on a norm price, which the Ministry sets for the different qualities of oil.
With the norm price we avoid the problem of internal pricing in multilateral companies.
With the norm price we avoid the problem of internal pricing in multilateral companies.
Our tax system is neutral: Projects that are profitable before tax are also profitable after tax.
Our tax system is neutral: Projects that are profitable before tax are also profitable after tax.
This means that the companies can deduct all costs at the same rate as we tax the income – through net profit tax.
This means that the companies can deduct all costs at the same rate as we tax the income – through net profit tax.
The tax system has been stabile over great many years providing predictability for the oil companies.
The tax system has been stabile over great many years providing predictability for the oil companies.
The tax system is company based.
The tax system is company based.
There is no ring fencing, and full consolidation between licenses.
There is no ring fencing, and full consolidation between licenses.
There are no signature bonuses, and no royalty.
There are no signature bonuses, and no royalty.
Investments are depreciated at a high rate – six years linear.
Investments are depreciated at a high rate – six years linear.
There is an uplift allowance against special tax: 22 percent of investments.
There is an uplift allowance against special tax: 22 percent of investments.
Losses can be carried forward with interest.
Losses can be carried forward with interest.
The neutrality implies that the government and company have the same incentive to maximise value.
The neutrality implies that the government and company have the same incentive to maximise value.
You might say that through the tax system the state is a sleeping partner in all licenses.
You might say that through the tax system the state is a sleeping partner in all licenses.
In 2005, we introduced a system where companies can get the tax deficit from exploration paid out annually.
In 2005, we introduced a system where companies can get the tax deficit from exploration paid out annually.
This has only a marginal cost for the state, but hugely improves the cash need for companies in the exploration phase.
This has only a marginal cost for the state, but hugely improves the cash need for companies in the exploration phase.
The State’s Direct Financial Interest (SDFI)
The State’s Direct Financial Interest (SDFI)
The Government holds shares directly in oil and gas fields, pipelines and land-based plants.
The Government holds shares directly in oil and gas fields, pipelines and land-based plants.
This is a cash-flow-system, not a legal entity.
This is a cash-flow-system, not a legal entity.
It is part of the fiscal budget.
It is part of the fiscal budget.
Petoro – the government owned limited company – is the business manager of the portfolio.
Petoro – the government owned limited company – is the business manager of the portfolio.
The Ministry of Petroleum and Energy is the owner of Petoro, whereas the Ministry of Finance is the owner of the SDFI-portfolio.
The Ministry of Petroleum and Energy is the owner of Petoro, whereas the Ministry of Finance is the owner of the SDFI-portfolio.
Petoro handles revenues and cost as any other company in the license.
Petoro handles revenues and cost as any other company in the license.
The State’s Direct Financial Interest is funded over the State Budget.
The State’s Direct Financial Interest is funded over the State Budget.
The net cash flow from the SDFI portfolio is transferred to the Government Pension Fund – Global.
The net cash flow from the SDFI portfolio is transferred to the Government Pension Fund – Global.
The estimated value of the SDFI-portfolio is today about 200 billion US dollar.
The estimated value of the SDFI-portfolio is today about 200 billion US dollar.
I have already mentioned Petoro.
I have already mentioned Petoro.
As you understand, this is a 100 % government owned limited company.
As you understand, this is a 100 % government owned limited company.
It is the business manager of the SDFI portfolio.
It is the business manager of the SDFI portfolio.
The Ministry of Finance owns the portfolio.
The Ministry of Finance owns the portfolio.
Petoro is relatively small, and has some 70 employees.
Petoro is relatively small, and has some 70 employees.
There are no dividends or tax liability, and Petoro is not an operator.
There are no dividends or tax liability, and Petoro is not an operator.
My Ministry pays Petoro through our budget.
My Ministry pays Petoro through our budget.
Petoro does not apply for new licences.
Petoro does not apply for new licences.
Ministry of Petroleum and Energy keep SDFI-shares where we want to capture extra economic rent.
Ministry of Petroleum and Energy keep SDFI-shares where we want to capture extra economic rent.
Today Statoil is treated like any other company on the Norwegian Continental Shelf.
Today Statoil is treated like any other company on the Norwegian Continental Shelf.
They have no preferential treatment on the NCS.
They have no preferential treatment on the NCS.
They apply and compete for licenses and they pay taxes like all other companies.
They apply and compete for licenses and they pay taxes like all other companies.
Dividend from Statoil is part of government take.
Dividend from Statoil is part of government take.
The Ministry of Petroleum and Energy act only as an owner.
The Ministry of Petroleum and Energy act only as an owner.
Statoil was established as a national oil company in 1972.
Statoil was established as a national oil company in 1972.
In 2001 it was privatised and listed on stock exchanges in Oslo and New York.
In 2001 it was privatised and listed on stock exchanges in Oslo and New York.
The Government holds a 67 % stake in Statoil
The Government holds a 67 % stake in Statoil
MPE acts as a shareholder the following way:
MPE acts as a shareholder the following way:
· The Ministry acts in General Meeting or assembly
· The Ministry acts in General Meeting or assembly
· We follow up deliveries in strategy, financial and operational results and dividend.
· We follow up deliveries in strategy, financial and operational results and dividend.
There are quarterly one-to-one meetings with Statoil management.
There are quarterly one-to-one meetings with Statoil management.
· The Ministry is represented in the nomination committee, which proposes members to the non-executive board and to the corporate assembly.
· The Ministry is represented in the nomination committee, which proposes members to the non-executive board and to the corporate assembly.
The Government Pension Fund Global and the fiscal rule
The Government Pension Fund Global and the fiscal rule
The Government Pension Fund Global – GPFG – was established in 1990, and the first transfer to the fund took place in 1996.
The Government Pension Fund Global – GPFG – was established in 1990, and the first transfer to the fund took place in 1996.
Norges Bank Investment Management manages the fund on behalf of the Ministry of Finance.
Norges Bank Investment Management manages the fund on behalf of the Ministry of Finance.
The Ministry of Finance owns the fund and provide the guidelines.
The Ministry of Finance owns the fund and provide the guidelines.
The fund was set up to give the government room for manoeuvre in fiscal policy should oil prices drop or the mainland economy contract.
The fund was set up to give the government room for manoeuvre in fiscal policy should oil prices drop or the mainland economy contract.
It also served as a tool to manage the financial challenges of an ageing population and an expected drop in petroleum revenue.
It also served as a tool to manage the financial challenges of an ageing population and an expected drop in petroleum revenue.
The fund is an integrated part of the government’s annual fiscal budget.
The fund is an integrated part of the government’s annual fiscal budget.
Its capital inflow consists of all government petroleum revenues.
Its capital inflow consists of all government petroleum revenues.
The so-called spending rule implies that no more than 4 percent of the fund’s return shall over time be spent on the annual national budget.
The so-called spending rule implies that no more than 4 percent of the fund’s return shall over time be spent on the annual national budget.
This rule was first established in 2001.
This rule was first established in 2001.
The capital is invested abroad, to avoid overheating the Norwegian economy and to shield it from the effects of oil price fluctuations.
The capital is invested abroad, to avoid overheating the Norwegian economy and to shield it from the effects of oil price fluctuations.
The fund holds 60 percent of its assets in equities, 35 percent to 40 percent in fixed income and as much as 5 percent in real estate.
The fund holds 60 percent of its assets in equities, 35 percent to 40 percent in fixed income and as much as 5 percent in real estate.
In 2012, transfers to this fund totalled more than 47 billion US dollar (NOK 270 billion).
In 2012, transfers to this fund totalled more than 47 billion US dollar (NOK 270 billion).
At the end of 2012, the fund was valued at 660 billion US dollar (NOK 3 816 billion).
At the end of 2012, the fund was valued at 660 billion US dollar (NOK 3 816 billion).
This corresponds to more than 130 000 US dollar (NOK 750 00) for every Norwegian citizen.
This corresponds to more than 130 000 US dollar (NOK 750 00) for every Norwegian citizen.
Pioneering achievements
Pioneering achievements
In Norway the petroleum sector has also bred a large oil and gas supply and service industry.
In Norway the petroleum sector has also bred a large oil and gas supply and service industry.
The industry has been a big success with sensational growth, and developed without people really noticing it.
The industry has been a big success with sensational growth, and developed without people really noticing it.
According to the Norwegian company Rystad Energy, the global market share is close to 80 percent on drilling equipment and 50 percent on seismic and subsea equipment.
According to the Norwegian company Rystad Energy, the global market share is close to 80 percent on drilling equipment and 50 percent on seismic and subsea equipment.
Not bad for a nation of 5 million people.
Not bad for a nation of 5 million people.
We have 40 years of experience solving challenges on the Norwegian continental shelf.
We have 40 years of experience solving challenges on the Norwegian continental shelf.
Exploration and exploitation have been demanding.
Exploration and exploitation have been demanding.
Fields have often been in deep waters, or located in remote areas with no infrastructure in place.
Fields have often been in deep waters, or located in remote areas with no infrastructure in place.
Technological development has been necessary to make fields economically viable, or possible to develop at all.
Technological development has been necessary to make fields economically viable, or possible to develop at all.
And the history continues.
And the history continues.
We are doing things we would not have dreamed of 20 years ago.
We are doing things we would not have dreamed of 20 years ago.
Thanks to this work, Norwegian industry has developed cutting edge technology: Subsea production systems, subsea compression, and multiphase flow over long distances and in deep waters are some examples.
Thanks to this work, Norwegian industry has developed cutting edge technology: Subsea production systems, subsea compression, and multiphase flow over long distances and in deep waters are some examples.
Fairly recent technological advances made the development of Snøhvit and Ormen Lange possible.
Fairly recent technological advances made the development of Snøhvit and Ormen Lange possible.
The Snøhvit gas field in the Barents Sea was discovered in 1984 and the field would not have been profitable without a subsea solution and multiphase flow.
The Snøhvit gas field in the Barents Sea was discovered in 1984 and the field would not have been profitable without a subsea solution and multiphase flow.
Another technology step forward is the Åsgard subsea compression project.
Another technology step forward is the Åsgard subsea compression project.
The closer the compression is to the well, the higher the efficiency and production rates become.
The closer the compression is to the well, the higher the efficiency and production rates become.
Other fields on the Norwegian continental shelf are planning technology tests and qualifications similar to those practised on Åsgard.
Other fields on the Norwegian continental shelf are planning technology tests and qualifications similar to those practised on Åsgard.
The engagement and interaction between oil companies, industry and research institutions have been fundamental in finding solutions to technological challenges.
The engagement and interaction between oil companies, industry and research institutions have been fundamental in finding solutions to technological challenges.
I am truly proud of the way these players have collaborated and are bringing world class technology and technological solutions to the market.
I am truly proud of the way these players have collaborated and are bringing world class technology and technological solutions to the market.
The fact that we have multiple environments and competition between the actors are important.
The fact that we have multiple environments and competition between the actors are important.
This is also reflected in the international success of Norwegian companies.
This is also reflected in the international success of Norwegian companies.
We see that the Norwegian subsea industry is expanding on the global market, and we find examples in countries such as Australia, Angola and Brazil.
We see that the Norwegian subsea industry is expanding on the global market, and we find examples in countries such as Australia, Angola and Brazil.
The Norwegian supply and service industry today
The Norwegian supply and service industry today
The Norwegian supply and service industry has been a big success with sensational growth.
The Norwegian supply and service industry has been a big success with sensational growth.
Today it is Norway’s most important industry after the sales of petroleum.
Today it is Norway’s most important industry after the sales of petroleum.
The total turnover exceeds 60 billion USD (360 mrd.
The total turnover exceeds 60 billion USD (360 mrd.
NOK).
NOK).
A Parallel and Active Commitment
A Parallel and Active Commitment
As mentioned, we have seen a drop in our oil production, and this is one of our main challenges.
As mentioned, we have seen a drop in our oil production, and this is one of our main challenges.