UK vs Norway oil policy ‘a tale of two halves’ says Vysus CEO

Norway and the UK are titans of North Sea oil production, however, policy across the two nations tells a “tale of two halves,” said Vysus CEO Thomas Aas Saethre.

“We see very different approaches politically depending on whether you’re based in Norway or the UK,” the Norwegian boss of the Aberdeen-based company said.

The headline rate of tax for oil and gas operators in Norway has always been higher than that paid by UK firms.

However, under the Labour Party’s plans for a “proper” windfall tax, UK operators will pay the same rate as Norwegian firms, 78%, as investment incentives are closed.

The key differentiator between Labour’s policy and Norway’s fiscal regime is fiscal incentives, firms that spend money within the Nordic country’s borders are subject to certain allowances that would not be present under the suggested UK tax policy.

“In Norway, there’s been quite a lot of incentive around the continued development of the Norwegian continental shelf,” Mr Aas Saethre explained.

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An “anchor customer” of Vysus’ operations in Norway is the country’s state-owned oil firm Equinor. He added: “We see a lot of activity from that [investment incentives] in our Norwegian business.

“In the UK it’s slightly different,” Mr Aas Saethre continued, “there’s more uncertainty, it’s more fragmented, and there’s obviously less Capex [capital expenditure] flying about in the UK.”

As the UK ramps up to a general election, the Norwegian boss said: “If you look at this from a purely oil and gas activity development standpoint you know there’s no doubt that the Norwegian tax incentives have been very beneficial to the Norwegian oil and gas sector.”

Thomas Aas Saethre argued that the incentives laid out in Norway have led to investment “in the supply chain” and “certainly it leads to job creation.”

‘Aberdeen is still our HQ’ – Vysus on making UK jobs

Job creation is exactly what the new Vysus boss wants to see happen, specifically in the firm’s Aberdeen base.

“Aberdeen is still our HQ, formally, although we are dispersed,” Mr Aas Saethre affirmed.

“We still have global capabilities and competencies that we use both in Aberdeen, in the UK, but also, we use those competencies globally, mostly in Europe but also in other areas of the world into the Middle East, for example.”

In a conversation with Energy Voice the man who recently took the helm of the consultancy firm explained that he is “making the team bigger” in Aberdeen.

“We’re looking to grow our top line somewhere between 15 and 20% year on year,” he said, later explaining that this growth will reflect a growing headcount.

“In a consulting business, it scales quite linearly. A fair assumption is that if we’re 100 people, I’m not saying we are 100 people, but if we grow 15% there’s going to be 15 more headcounts.”

This trajectory has the potential to see Aberdeen grow disproportionately to other Vysus bases.

“There are certain competencies in Aberdeen where we see probably see the potential for higher growth rate,” he explained.

This can be chalked up to the offering the Aberdeen Vysus team provides and the growth the north-east Scotland base is experiencing in demand for its services.

Risk management and environmental services are seeing the most “pull from the market,” Mr Aas Saethre explained.

“We see a pull from renewables we see more pull on compliance and regulatory advice, that’s probably where we see the biggest potential for a consulting business just now.”