{"id":8296,"date":"2013-08-05T00:00:00","date_gmt":"2013-08-05T00:00:00","guid":{"rendered":"https:\/\/www.westwoodenergy.com\/dw-monday-arctic-oil-gas-3\/"},"modified":"2022-09-07T02:52:25","modified_gmt":"2022-09-07T01:52:25","slug":"dw-monday-arctic-oil-gas-3","status":"publish","type":"post","link":"https:\/\/www.westwoodenergy.com\/news\/dw-monday-arctic-oil-gas-3","title":{"rendered":"DW Monday: Arctic Oil &#038; Gas &#8211; Alaska 1, Norway 0"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-3020\" src=\"http:\/\/www.douglas-westwood.com\/wp-content\/uploads\/2015\/05\/DW-Monday-Logo-PNG-300x75.png\" alt=\"DW Monday\" width=\"300\" height=\"75\" \/>E&amp;P costs have been increasing by 11% per annum for the last five years, according to Barclays Capital. And nowhere are they increasing faster than in remote and harsh offshore environments like Alaska\u2019s OCS or Norway\u2019s north Barents Sea. But the governments of Alaska and Norway have taken diametrically opposite courses. Alaska decreased its marginal tax on arctic oil production from 85% to 35%, and BP promptly moved to add two new rigs to its Prudhoe Bay operations. By contrast, the Norwegian government has raised taxes on its oil industry, prompting Statoil to defer the Johan Castberg north Barents Sea project.<\/p>\n<p>Although the Brent oil price has shown signs of life in recent days, we believe that exploration and production costs will continue to outpace oil price gains, just as they have for the last two years. Therefore, industry economics will remain under pressure. And if the costs of oil extraction are increasing, then governments sooner or later will have to appreciate that the value of reserves in the ground is falling. Far from being able to grow government take (including taxes, royalties and production sharing), the oil companies will increasingly be requiring direct or indirect tax cuts if production&#8211;and oil field services employment&#8211;is to be maintained.<\/p>\n<p>Back in the Arctic, the State of Alaska seems to be catching on; Norway, less so. For now, Alaska 1, Norway 0.<\/p>\n<p>Steven Kopits, Douglas-Westwood New York<br \/>\n+1 212 786 7507 or <a href=\"mailto:steven.kopits@douglaswestwood.com\">steven.kopits@douglaswestwood.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>E&amp;P costs have been increasing by 11% per annum for the last five years, according&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[48,49],"tags":[],"class_list":{"0":"post-8296","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-news","7":"category-westwood-insight"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>DW Monday: Arctic Oil &amp; Gas - Alaska 1, Norway 0 - Westwood<\/title>\n<meta name=\"description\" content=\"E&amp;P costs have been increasing by 11% per annum for the last five years, and nowhere faster than in Alaska\u2019s OCS or Norway\u2019s north Barents Sea.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.westwoodenergy.com\/news\/dw-monday-arctic-oil-gas-3\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DW Monday: Arctic Oil &amp; 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