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Saturday, April 20, 2024

Rig tax evasion case underway

The largest tax evasion case in Norwegian history was due to enter its second week on Monday, with prosecutors claiming that tax advisers for Houston-based rig firm Transocean must have known they were misleading tax authorities.

Transocean has been a major player in the rig market on the Norwegian continental shelf for many years. PHOTO: Statoil/Harald Pettersen

Raids on Transocean’s offices in Stavanger and years of investigation have led to the firm, its advisers and affiliates being charged with evading taxes on as much as NOK 11.4 billion (USD 2 billion).

Transocean is one of the world’s biggest rig companies with 18,000 employees, 900 of them in Norway. Newspaper Dagens Næringsliv (DN) has closely been following the case, which began nearly 12 years ago when Norwegian tax authorities started asking questions about Transocean’s internal rig sales as long ago as 1999.

Prosecutors claimed last week that Transocean’s tax planning was managed in detail from its Houston headquarters, with Norwegian tax advisers at Ernst & Young as central players. A tax attorney at Oslo law firm Thommessen is also involved in the case but local Transocean management in Norway isn’t believed to have been involved. Prosecutors claim the alleged tax evasion was conducted from Houston headquarters.

Norway’s white-collar crime unit Økokrim claims it can prove that the advisers knew what they were doing when they neglected to inform Norwegian tax authorities about various aspects of Transocean’s internal transactions, including the sale of its rig Polar Pioneer. Økokrim has charged Transocean Inc, Transocean Offshore Deepwater Drilling Inc, Arcade Drilling AS, two of their Norwegian lawyers and a tax adviser.

Transocean’s defense attorneys were due to start stating their objections to the charges this week. The case is expected to last eight months, with a verdict due in 2014.

The massive tax evasion case comes amidst a major rig boom in Norway, with optimistic operators, fueled by a wave of oil and gas exploration projects, saying they’ll be boosting the number of drilling rigs on the Norwegian continental shelf from around 30 to more than 50 over the next few years, and will need around 3,000 new offshore staffers to operate them. staff



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