Energy, Europe, News, Oil

Norway’s Statoil Unveils its Government Payments Worldwide

Norway’s oil and gas company, Statoil, disclosed how much money it paid to the governments around the world in 2014. The 35-page report called “2014 – Payment to Governments” is an unprecedented publication of the details of the remittances made by an oil company in all countries where it operates: Algeria, Angola, Azerbaijan, Brazil, Canada, Libya, Nigeria, Norway, Russia, the UK, the US, and Venezuela. Statoil says that the main reason behind this move is its struggle to make revenue legislation more transparent. The company, however, believes that a global standard for revenue is more important. According to the report, the EU Transparency Directive requires Member States and EEA countries to introduce related legislation by 1 January 2016. The first reports should be handed in a year later. Norway adopted such a law already two years ago.

The payments to governments can generally be divided into a number of categories: taxes, royalties (usage-right payments), license fees (right to use a geographical area for exploration), bonuses (sums to be paid when discovering natural resources or when production starts), and host government entitlements (a host government’s share of production or other ownership rights). Based on the report, after Norway, Statoil’s second largest recipient of payments is Angola followed by Azerbaijan and Nigeria. In Angola, Statoil’s personnel are the most significant contributor to the company’s output outside Norway. Moreover, Angola is the backbone of the company’s international output growth.

In Azerbaijan, Statoil’s operations are also significant. The firm participates in the production in Azeri-Chirag-Gunashli field. Moreover, it co-runs the Baku-Tbilisi-Ceyhan oil pipeline, which runs from Baku to the Turkish port of Ceyhan. In Nigeria, Statoil is a large player as well owning a 20 percent share in the country’s biggest deep water oil production field Agbami. Yet, Nigeria imposes also so-called “education tax” on the companies operating in the country. Last year, Statoil had to pay 360 million Norwegian crowns just to cover this tax.

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