Norway has enough reserves to continue drilling for another 50 years
While the rest of Europe struggles to breathe life into a wheezing economy, Norway is in the enviable position of
seeing its state coffers grow richer by the day thanks to its abundant oil and gas reserves in the North Sea.
"During the 30 years of petroleum production on the Norwegian continental shelf, less than a quarter of the petroleum resources has been produced," Norwegian Oil and Energy Minister Einar Steensnaes said. "This illustrates that the largest values in the petroleum activity are still ahead," he said as he presented a report on the future of the country's oil and gas production.
Norway, the world's sixth-largest producer and third-largest exporter of oil, has enough reserves in the North Sea
and Norwegian Sea to continue oil drilling for another 50 years. Its natural gas supplies are expected to last for at
least another century.
A relatively new country that only gained independence from Sweden in 1905, Norway was for a long time the poorest of the northern European nations. But the discovery of vast amounts of oil and gas off Norway's coast in the 1970s changed all that.
The find was a jackpot, especially for a country with no real industrial traditions. Today, oil and gas account for 23 % of Norway's gross domestic product, three times the amount produced by traditional industry. They also make up 45 % of exports and generate 32 % of the state's revenue.
The sector employs some 74,000 people directly and another 220,000 indirectly, and as a result unemployment is nearly
nonexistent. Named by the United Nations as the country with the highest standard of living in the world last year,
Norway, unlike its European neighbours, does not have to worry about how to finance future pensions.
Almost all of the revenues from the state's share of the oil wealth are placed in a special Petroleum Fund, which in turn is invested in international shares and bonds. Established only a few years ago, the fund was already worth 613.7 bn kroner (EUR 83 bn, $ 82.2 bn) at the end of 2001, or the equivalent of 136,377 kroner (EUR 18,379, $ 18,205) for each of Norway's 4.5 mm inhabitants.
With such a sizeable nest egg -- and one that is bound to grow in years to come -- Norwegians feel they have little
in common with other Europeans. And little need for Europe. The country has twice rejected the idea of joining the
European Union, in referendums held in 1972 and 1994.
And despite its rank as one of the biggest oil producers in the world, it has also refused to join OPEC. In December, Oslo did agree to support OPEC in its bid to boost sagging oil prices, and reduced its daily production by 150,000 barrels to some 3 mm bpd. But Norway insists that that was a one-off cooperation.
"Regulation of Norwegian crude oil production will be a temporary arrangement in response to an exceptional market situation, and will not be a permanent element of the Norwegian market policy," Steensnaes said. "Norway will not enter into any formal cooperation with other producing countries on production regulation," he said.