Solberg Says Norway Is Safe Investment Amid Policy Disturbances

Norway, western Europe’s largest oil producer, is still a safe bet for oil and gas companies even as political wrangling this month cast doubt over the development of key offshore projects, Prime Minister Erna Solberg said.

Oil and gas producers this month warned of delays after a bloc in parliament defied the minority government and tried to force Statoil ASA and other producers to prepare to power North Sea developments from land. Labor, Norway’s largest opposition party, then backed off yesterday and struck an agreement with Solberg’s government to avoid potential costly delays.

“Compared to most other countries that do oil and gas exploration, we will be looked upon as the most predictable country, regardless,” Solberg said in an interview today after question time in parliament. “These are just small disturbances.”

The agreement with Labor means that three fields close to the Johan Sverdrup find, the biggest discovery off Norway in at least 30 years, can be powered from land in the development’s second phase. That scaled back demands from earlier calls for the government to require that companies prepare for an electrification system for the three fields surrounding the Johan Sverdrup discovery in the startup phase.

The opposition’s initiative would have been a setback to both the government and oil companies operating the fields, who all warned of costly delays to Sverdrup, which is due to start production in 2019.

The move came after last year’s surprise tax increase on oil output. Norway is also facing lawsuits from investors in the nation’s gas pipelines, including Alliance AG and Abu Dhabi’s sovereign wealth fund. They are seeking to reverse a 2013 decision by the government to cut the tariffs they can charge to transport fuel by as much as 90 percent.

Solberg, who was elected last year, said she remains confident in Norway’s stable and predictable investment climate.

Labor is “trying to find its place as an opposition party -- maybe they saw an opportunity to kick the government a bit,” she said. “The solution is going to be fine, the rationale for how the government has been assessing this has been strong.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE