Oil and gas tax revenues will never again approach trillion-dollar mark: Rystad
Global petrostates will miss the former glories of trillion-dollar oil and gas tax revenues as the accelerating energy transition will cause this source of state income to shrink and never again exceed or meet 12-digit figures, new analysis from Norwegian energy intelligence firm Rystad suggests.
2021 will be the last year global oil and gas taxes will approach the trillion-dollar mark, reaching about $975bn according to Rystad Energy estimates, assisted by high oil prices.
From 2022, taxes will be limited to the low $800bn range, only ticking up in the early 2030s to about $900bn, before starting their final and uninterrupted decline to as low as $580bn in 2040 and about $350bn in 2050.
“As the energy transition ramps up, countries highly dependent on tax revenue from the upstream industry may have no other option than to diversify their economy to sustain state budgets. This is clearly the rational course for them to follow, but there are inherent challenges in the form of insufficient economic and legal institutions, infrastructure and human capital,” said Espen Erlingsen, head of upstream research at Rystad Energy.
