Why Norway
Norway’s rich reserves of hydrocarbons, efficient tax terms, robust infrastructure and leading safety and environmental standards make it the perfect place to focus Wellesley’s operations.
The country has been an established petroleum province for fifty years and will continue to produce for another fifty. Norway’s pipeline gas provides security of supply to its European markets in a time of increasing demand and geopolitical uncertainty.
Lowest CO2 hydrocarbon province
The Norwegian Continental Shelf has the lowest upstream CO2 intensity of all global jurisdictions. Norway’s modern infrastructure and platforms that are powered from shore ensure that its hydrocarbons are some of the cleanest in the world.
Future CCS and floating offshore wind projects will see Norway continue its path of upstream decarbonisation.
Significant Yet-to-Find Resources
The Norwegian Petroleum Directorate estimates undiscovered resources of around 24 bln boe remaining from the NCS.
Significant drilling opportunities remain in all areas of the shelf, across a range of different geological intervals and with many prospects located close to existing infrastructure. Yet-to-find resources are split evenly between oil and gas prospects.
Tax Efficient Exploration & Development
In 2021, Norway altered its tax rules to favour development investments. The Special Petroleum Tax (SPT) was amended to feature a 71.8% tax rate with one year depreciation. Any tax loss is to be refunded in the following year, as a cash rebate, if the company is not in a tax paying position.
This change levels the playing field between companies that have production and those that do not. It means that a company like Wellesley can invest in development capex on a post-tax basis, with 71.8% of project capex refunded by the Norwegian state in the year after investment.
Supportive Operating Environment
Norway is an advanced OECD economy, with oil and gas as its largest industry and an AAA credit rating. It is a major, established oil and gas province, which has been producing since the 1970s.
Norway is a reliable supplier of oil and gas to European markets, providing around 21% of EU gas demand and 9% of EU oil demand. Norway has some of the highest safety and environmental standards for oil and gas operations anywhere in the world, as well as a stable and supportive fiscal and regulatory regime.
ESG & Norway
Norway’s energy infrastructure, coupled with its strong safety and governance culture, complements and supports Wellesley’s ESG goals.