Daily Management Review

Norway shuts the door for foreign Oil and Gas investors


05/30/2017


Norway is trying to take new measures to prevent foreigners from increasing their share in offshore fields in the country. Apparently, this move is aimed at Russia, whose interest in Norwegian oil and gas projects has grown recently, Bloomberg reports.



Michael Spiller
Michael Spiller
In recent proposed changes to the sectoral regulations, the Norwegian government on grounds of national security has toughened the possibility to reject applications from non-European entities in terms of acquiring licenses to develop offshore oil and gas fields. 

"I would interpret this as a desire to create a more secure legal framework for imposing restrictions on foreign ownership", Ivar Alvik, a professor of law at the University of Oslo, said in a telephone interview.

Norway is struggling with accelerating changes in the ownership of the oil industry, which is under the pressure of the oil prices collapse, as well as the transition to renewable energy sources and a reduction in resources.

BP and Exxon Mobil abandoned the role of field operators in Norway, and large utility companies such as RWE sold their local oil and gas companies. Smaller, more specialized companies, often supported by private equity, are gathering their positions, and Russian companies are among those who want to move to the country.

According to Arild Moe, senior research fellow at the Fridtjof Nansen Institute in Oslo, the changing composition of companies raises concerns about the financial power of newcomers and stimulates questions about more strategic issues such as protecting the entire natural gas supply system in Norway.

"This is an infrastructure with a high strategic importance", he said, "this concerns very strong economic interests both in terms of access and knowledge of how this works." 

The Norwegian Ministry of Oil and Energy reported that this change puts the country in line with the rest of Europe. The provision of national security exists in the European directive, but Norway did not include this point when in the 1990s, the document was adopted in the national legislation. Norway is not a member of the European Union, however it adopts a number of the most important EU legal norms, since it has access to the single European market.

source: bloomberg.com






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