Denmark Raises Tax On Seven North Sea Oil Operators

By MarEx 2013-09-18 08:32:00

Denmark's center-left government has won support in parliament to raise taxes for seven oil companies operating in the North Sea, which could result in proceeds of 28.5 billion Danish crowns ($5.10 billion) until 2040.

The seven operators, which have licences agreed before 2004, will have their tax rate increased to around 62 percent of profit from around 35 percent, thereby matching tax schemes for operators with deals entered into since then.

The higher tax will hit U.S. company Hess, Germany's Bayerngas, RWE Dea and VNG, Norway's Noreco, and Danish firms Danoil Exploration and DONG Energy.

Danish Underground Consortium (DUC), which includes A.P. Moeller-Maersk, Royal Dutch Shell Plc and Chevron and represents around 86 percent of Denmark's oil production, will not be influenced by the tax increase, as it already operates under the tax rules that will now apply to all operators.

According to the deal made with the leftist Red-Green Alliance and the right-wing Danish People's Party, the proceeds will be used to improve the Danish railway system.