Press Release

Date: 4.10.99

Measures and new framework conditions for the yards and the petroleum industry

Major parts of the supply industry are struggling to obtain work. New measures towards the yards and the petroleum industry are necessary. The measures both are aimed at helping the industry overcome the difficult situation they are facing now, and make the industry better suited for adapting to the market conditions that will characterize the industry in the coming years.

Measures towards the yards and the supply industry

• 100 million NOK is proposed to ensure the development of new technology and competence in the petroleum industry through the "Demo 2000" program. This is a continuation of a similar amount of money granted in the 1999 budget. A steering committee with representatives from oil companies, supply industry and research institutions will assure that the money is applied in the best possible way. The aim is to speed up the technology development so that new projects more rapidly will be ready for development.
• Special training courses will be directed at petroleum related industry suffering from the drought in investment. It is important with training measures aiming at changing the industry while keeping the key competence. The Norwegian Labour Market Administration shall, together with the industry, prepare and organize the training.
• The Government proposes a grant for a new marine research vessel, and will in addition support the building of two new vessels for the "Hurtigrute Line". The building of a new coast guard vessel will be started as soon as the ongoing negotiations are concluded.
• The Parliament has approved an increase in the amount of loans that can be granted for the purchase and conversion of ferries. With this extended mandate and previous consents, about 10 new ferries will be delivered next year.
• The yard subsidy program will be continued at today's level, i.e. subsidy rates of 9 per cent for newbuilds and 4,5 per cent for smaller newbuilds and conversions, similar to the rates of the EU.

Measures directed towards the activity level on the shelf

• The CO2-tax is proposed reduced by 21,3 per cent, to 0.70 NOK per litre oil/standard cubic metre gas. The proposal will contribute to an increase in the profitability in existing and new fields, and should give a basis for the companies to put forward new projects. At the same time the tax level will be sufficient for companies to act in an environmentally efficient manner.
• The royalty will gradually be abolished for the eight fields that today are affected by the tax. This will contribute to a removal of the adverse effects this tax has with respect to new investments on existing fields and in the tail end phase of the production. The Government has chosen to divide the fields into three groups:
  • For Heimdal, Tor and Murchison the tax will be abolished by 1.1.2000.
  • For Valhall, Statfjord and Ula the tax will be phased out over a period of three years. For Valhall the phase out will start 1 November 1999, for the other two it will start 1.1.2000.
  • For Oseberg and Gullfaks the tax will be phased out over a period of six years.

Internationalization

• The Government proposes more money for internationalization. In the 2000 budget 5 million NOK is proposed for the internationalization of the petroleum activities, an increase of 1,5 million NOK from the adopted 1999 budget. The grants will be channelled through the foundations Petrad and Intsok.

By strengthening the work with internationalizing Norwegian petroleum industry, the Government wishes to give its support so that the competence, experience and technology base developed during 30 years of operations on the Norwegian Continental Shelf will contribute to new business opportunities. Experience from international projects will also give enhanced knowledge and insight, which will benefit the activities in Norway and contribute to the launching of new cost efficient development solutions on the Norwegian shelf.

Contact:
Leiv Ellingsen, MLGA, +47 22 24 46 09
Øistein Øisjøfoss, MTI, +47 22 24 01 25
Sissel Edvardsen, MPE, +47 22 24 61 09