Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192874 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
Discussion Papers No. 892
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
For different reasons the oil companies might apply higher required rates of return than they did some years ago, and this will have consequences for investments and tax revenue in oil provinces. By applying various required rates of return as well as various oil prices, this study derives future Norwegian tax revenue during 2018-2050 by using a partial equilibrium model for the global oil market. The model explicitly accounts for reserves, development and production. Both investment in new reserves and production are profit driven. With rising required rates of return less of the high cost reserves become profitable to develop and investments decline. Because the government in practice carries a large fraction of the investments, less investment in a period increases the tax base and the tax income. The initial effect is offset by a subsequent reduction in production which has a negative effect on future taxes. The result is that increasing required rates of return will lead to small variations in net present value of total tax revenue. With lower oil prices, tax take increases significantly when required rates of return rise.
Subjects: 
Norwegian continental shelf
oil market
rates of return
fiscal policy
tax take
equilibrium model
firm behaviour
JEL: 
H21
H32
L20
Q35
Q38
Document Type: 
Working Paper

Files in This Item:
File
Size
1.24 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.