Norway’s 2015 Fiscal Budget Focuses on Non-Oil Sectors

Norway’s government sees a minor increase in oil and gas exports in the current and in the next year, saying in its 2015 Fiscal Budget that the country needs to foster other sectors of the economy. 

“Lower demand from the petroleum sector poses a challenge to the mainland economy. We must ensure that our economy is able to adapt to changing circumstances. The government aims to foster productivity growth and implement measures to increase the economy’s growth potential,” Minister of Finance Siv Jensen said on Wednesday. 

The government unveiled a 2015 budget with a structural non-oil deficit of NOK 164 billion, equivalent to 3% of the value of the Government Pension Fund Global. The structural deficit as a share of GDP has been increased by 0.5%. 

In the document, the total recoverable resources on the Norwegian continental shelf have been confirmed at 14.2 billion standard cubic metres of oil equivalents, equivalent to 89 billion barrels. 

“The resource base on the continental shelf provides a foundation for value creation for many decades to come. To exploit this resource base, we have to work together to overcome the challenges we face, ensuring that the industry is efficient and competitive. We must also continue to concentrate on existing fields, develop new discoveries close to existing infrastructure and explore immature areas,” Minister of Petroleum and Energy Tord Lien commented in a separate note.

The Ministry of Petroleum and Energy also said that the the Government is embarking on a challenging project, committing to a full-scale CCS demonstration facility by 2020. 

However, the budget has been criticised by market participants, who claimed that the government failed to deliver tax incentives to promote the oil and gas sector.