The Norwegian Petroleum Experience

Transcription

1 The Norwegian Petroeum Experience Civi society and natura resource management Norwegian Institute of Internationa Affairs (NUPI Tuesday, October K Professor Oe Gunnar Austvik BI / NUPI Mob:

2 The Norwegian Petroeum mode Austvik, Oe Gunnar, 2014: "The Norwegian Petroeum Experience as an Exampe?" The Internationa Shae Gas and Oi Journa, ISG&OJ. Vo 2 Issue 2. pp Austvik, Oe Gunnar, 2012: "Landord and entrepreneur. The shifting roes of the state in Norwegian oi and gas poicy. Governance. An Internationa Journa of Poicy, Administration, and Institutions. Voume 25, Issue 2, pp

3 When petroeum activities started in the 1960s and 1970s, Norway had cose to no knowedge about the petroeum industry. THE VISION: A decaration of the principes for Norwegian oi poicy: The 10 Oi Commandments of 1971: - The natura resources on the Norwegian Continenta Shef (NCS) shoud benefit the entire nation (The industria committee s report to the Pariament ) -> A heavy roe for the Norwegian state system

4 Norway s 10 Oi Commandments 1. That nationa management and contro must be secured over a operations on the Norwegian continenta shef. 2. That petroeum discoveries are expoited in a way which minimizes Norway's dependence on others for crude oi suppies. 3. That new industria activities shoud be deveoped on the basis of petroeum. 4. That deveopment of an oi industry must take the necessary account of existing industria operations and of protecting nature and the environment. 5. That faring of usabe gas on the Norwegian continenta shef must not be accepted except for brief periods of testing. 6. That petroeum from the Norwegian continenta shef must, as a main rue, be anded in Norway with the exception of individua cases where nationa poicy concerns ca for a different soution. 7. That the state becomes invoved at a appropriate eves, and contributes to a coordination of nationa interests in the Norwegian petroeum industry as we as the creation of an integrated Norwegian petroeum community which sets its sights both nationay and internationay. 8. That a state oi company be estabished to take care of the state's commercia interests and to maintain suitabe coaboration with domestic and internationa petroeum interests. 9. That a pattern of activity be seected north of the 62nd parae [i.e., outside the North Sea] which satisfies the specia poicy concerns that appy in this region. 10. That Norwegian petroeum discoveries on a arge scae coud add new dimensions to Norway's foreign poicy. Source: Stortingsmeding 1971 (unofficia transation by NPD 2000).

5 The state and the buid-up of the Norwegian petroeum industry Poitica background: Traditiona socia democracy with strong state invovement Experiences from the hydro power sector Strong invovement in industry and economic affairs especiay after WWII Estabished in 1972 (unanimous Storting / Pariament): Statoi as a fuy state-owned company Instrument for governmenta contro and as industria ocomotive A petro bureaucracy Norwegian petroeum directorate (NPD), strengthening of the ministry (IM -> MPE) Good resource management and maintenance of sovereignty Poitica authorities, poitica eaders and the bureaucracy cosey tied together - The abor party on a sides of the tabe The question was never (then or ater) whether the state shoud be invoved or not, but how. Across party ines. Infant industry protection Preference for Norwegian suppiers Statoi (and ater Hydro) got the best icenses Statoi got typicay 50 % or more + Giding scae + Carrying principe The internationas shoud teach us how to do it Case: Statfjord and Statoi take-over after Mobi as operator Externa forces Nationaization of oi industry in OPEC countries

6 The roe of the state and the business - government mixture changes over time Contro through Statoi was graduay repaced by a more direct governmenta contro system (principa agent critique) 1984: The estabishment of State s Direct financia interests (SDFI) The Wing cippings of Statoi 1985: A gas negotiation committee (Ministry of Petroeum and Energy MPE - to accept contracts) 1985: The suppy committee (MPE to queue fieds and production) Two other Norwegian companies Hydro and Saga were growing in importance Industria and market maturation, ower prices after the mid-1980s. EU reguations and the privatization in 2001 makes the roe of MPE more expicit Statoi party privatized (now ca 70 % owned by government). From a NOC to a SNOC. Ony maximize profit Petoro estabished to take care of SDFI Reorganization of gas saes and transportation (EU) Gassco and GasLed The merger between Statoi and Hydro s oi and gas division in 2006 gave Statoi eements of monopoistic position on the NCS. No compensatory measures taken by the MPE Concusion: The reationship between the company and government has formay changed, but: Statoi is sti seing SDFI / Petoro oi and gas (and has swaowed Hydro oi and gas division) Petoro and Statoi represent some % of tota production Norway never iberaized the petroeum sector as part of the ibera winds from the 1990s. Canada, UK Question: Company competence and interests vs the State and the ministry? Are commercia interests increasingy overrunning poitica / nationa considerations? Is Statoi increasingy running Norwegian petroeum poicy?

7 Location and empoyment in the Norwegian suppy industry. Kide: Menon Business Economics, IRIS, Ramm Energy Partner (2011) 7

8 Norway has a sea territory 7 times arger than mainand Norway More than 60 % of Norwegian exports come from the sea: - Fishery, shipping, oi and gas 5 miion peope (~ 1 %of EU, < 1 %0 of word) High per capita income a very rich state 8

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11 Vaue Creation in Norwegian Sectors 2011 Source: MPE Fact Sheet 2012

12 Cacuation of the Norwegian tax on petroeum companies % of net (economic) profit Source: MPE Fact Sheet

13 The State s Direct Financia Interest (SDFI) The State owns directy interests in a number of oi and gas fieds, pipeines and onshore faciities in order to take the risk and costs, but aso ALL the economic rent. The state pays its share of investments and costs, and receives a corresponding share of income from the production icense. The expenditures are accounted when they occur, so are aso the revenues (no depreciation) Estabished in 1985 as part of the Wing-cippings of Statoi (one share of od Statoi for the new Statoi and the other for SDFI. Prior to this Statoi aone was responsibe for the state s ownership hodings in production icenses Typicay, the SDFI takes high shares of the most profitabe fieds and ow, or no, in more margina fieds When Statoi was privatized in 2001, the administration of the SDFI was transferred to the state-created trust company Petoro Petoro is the argest icencehoder on NCS (24 % oi, 41,6 % gas) and represents today more than 40 % of tota production Source: MPE Fact Sheet 2005

14 Net Norwegian government cash fow from petroeum activities (= ca. 90 Bi USD) 1996: First money into the Fund Source: MPE Fact Sheet 2014

15 Market Vaue of the Norwegian Petroeum Fund? The Net cash fow goes into the Petroeum Fund (now caed the Government Pension Fund Goba) The government uses some of it to baance the Budget. The 4 percent fisca rue (Handingsregeen). The rest is saved in internationa portfoio investments together with the return on these investments With high oi prices and a arge fund the capita increases rapidy Source: Fact Sheet

16 10 Word s argest Sovereign Weath Funds September 2013

17 Norway

18 Chaenges Oi dependency doube economy? The Fund: How sha it eventuay be used or sha we «ony» accumuate more? Easy come easy go Identity poitica system to hande the money over time Word and European economic and poitica deveopments Financia crash? Economic and poitica weights move from West to East The industry: New energy sources come (shae oi / gas, renewabes..) Price consequences Other? 18

19 Thank at ot for your attention! Questions remarks? Oe Gunnar Austvik