Oil companies are prepared to do business in countries with high tax rates if the market they are entering also offers stability, according to Erik Solheim, Norway’s Minister for the Environment and International Development.
Solheim, who was speaking exclusively to the global publishing, research and consultancy firm Oxford Business Group (OBG), would like to see Ghana adopt Norway’s format of putting a higher tax on oil and gas rather than taxing windfall profits.
“The most important thing for oil companies is predictability,” he said. “In Norway’s case, investors still want to come and it will be the same for Ghana if companies feel confident that the taxation rate, though high, is consistent over time.”
Norway has played a key role in assisting Ghana since its major oil discovery in 2007 by helping her draft its Revenue Petroleum Management Bill. It has also advised the government on a number of processes including taxation and negotiating with oil companies.
Solheim believes that following best practices is pivotal to minimising environmental risks during hydrocarbons exploration. “There have been a lot of technological improvements over the last few years, so we always need to look at the best practices and undertake sound, transparent studies before embarking on new oilfield activities,” he said.
He was also confident that emerging oil countries like Ghana would be well placed to contribute to upstream activities in Norway when its hydrocarbon production eventually declines. “We want Norwegian oil businesses to invest abroad as long as their investments are in accordance with the best practices and sound management,” he said. “As such, countries such as Ghana will become increasingly important.”
Solheim, who was speaking exclusively to the global publishing, research and consultancy firm Oxford Business Group (OBG), would like to see Ghana adopt Norway’s format of putting a higher tax on oil and gas rather than taxing windfall profits.
“The most important thing for oil companies is predictability,” he said. “In Norway’s case, investors still want to come and it will be the same for Ghana if companies feel confident that the taxation rate, though high, is consistent over time.”
Norway has played a key role in assisting Ghana since its major oil discovery in 2007 by helping her draft its Revenue Petroleum Management Bill. It has also advised the government on a number of processes including taxation and negotiating with oil companies.
Solheim believes that following best practices is pivotal to minimising environmental risks during hydrocarbons exploration. “There have been a lot of technological improvements over the last few years, so we always need to look at the best practices and undertake sound, transparent studies before embarking on new oilfield activities,” he said.
He was also confident that emerging oil countries like Ghana would be well placed to contribute to upstream activities in Norway when its hydrocarbon production eventually declines. “We want Norwegian oil businesses to invest abroad as long as their investments are in accordance with the best practices and sound management,” he said. “As such, countries such as Ghana will become increasingly important.”
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