Payments to governments

Reporting of payments to governments

This report is prepared in accordance with the Norwegian Accounting Act § 3-3 d), which is a new requirement applicable from the financial year 2014. The requirement states that companies engaged in activities within the extractive industries shall annually prepare and publish a report containing information about their payments to governments at country and project level. The Ministry of Finance has issued a regulation (F20.12.2013 nr 1682 –”the regulation”) stipulating that the reporting obligation only applies to reporting entities above a certain size and to payments above certain threshold amounts. In addition, the regulation stipulates that the report shall include other information than payments to governments, and provides more detailed rules with regard to definitions, publication and group reporting.

 

This report contains information for the activity in the whole fiscal year 2014 for Norwegian Energy Company ASA (“Noreco”) and its subsidiaries. Noreco’s management has applied judgment in interpretation of the wording in the regulation with regard to the specific type of payment to be included in this report, and on what level it should be reported. When payments are required to be reported on a project-by-project basis, it is reported on a licence-by-licence basis. Only gross amounts on operated licences are reported, as all payments within the licence performed by licence-partners, normally will be cash calls transferred to the operator and will as such not be payments to the government. Noreco has activities in Norway, Denmark and the United Kingdom. Payments to Norwegian, Danish and British governments are considered to be within the scope of this reporting.

 

Reporting of payments

The regulation § 2 no.5 defines the different types of payments subject to reporting. In the following sections, only those applicable to Noreco will be described.

 

Income taxes

The income tax is calculated and paid on corporate level and is therefore reported for the whole company rather than at licence level. The following table summarises payments of income taxes in 2014 (NOK million):

 

Company

Paid (refunded) income tax 2014

Norwegian Energy Company ASA

(1)

Altinex AS

-

Noreco Norway AS

(378)

Noreco Denmark A/S

11

Noreco Oil Denmark A/S

(16)

Noreco Petroleum Denmark A/S

-

Noreco Oil (UK) limited

-

Noreco Petroleum (UK) limited

7

Norwegian Energy Company (UK) limited

 

Total Noreco Group

(378)

 

NOX fees

The company is a member of the NOX fund and all NOX payments are made to this fund rather than to the government.

 

Area fees

The table below specifies the area fee paid by Noreco on behalf of the different licences in 2014 (NOK 1 000):

 

Licence/company

Paid  area fees 2014

Noreco Norway AS:

 

PL484

4 903

Norwegian Energy Company (UK) limited:

 

-       P1768

400

-       P1934

92

-       P1989

1 009

-       P2009

297

 

Other information

When entities are required to report payments as the above, it is also mandatory to report on investments, sales income, production volumes and purchases of goods and services in the country for which companies have activities within the extractive industries. This reporting requirement is considered to be met by the financial statements and accompanying notes, and is summarised below:

 

Country

Investments 2014 (NOK million)

Norway

267

Denmark

46

United Kingdom

5

Total investments 2014

319

 

Country

Sales income 2014 (NOK million)

Norway

101

Denmark

431

United Kingdom

610

Total sales income 2014

1 143

 

Country

Operating expenses 2014 (NOK million)

Norway

406

Denmark

319

United Kingdom

866

Total operating expenses 2014

1 591

 

Country

Production (boepd)

Norway

537

Denmark

2 070

United Kingdom

2 892

Total production (boepd) 2014

5 499