Norway’s Energy Investment Reputation Wanes as Parliament Intervenes

< Back to all news

Norway’s Energy Investment Reputation Wanes as Parliament Intervenes


Category: Energy

In an unprecedented move, the opposition in parliament last week decided to push for detailed legislation on a field development before a production plan has been submitted. The plan calls for the government to require that companies prepare for an electrification system for three fields surrounding Johan Sverdrup, as part of an effort to cut greenhouse gas emissions.

Norway, western Europe’s largest oil producer, is angering a growing number of oil and gas companies after dictating terms for offshore projects worth billions of dollars.

In the latest blow to the nation’s reputation, the opposition bloc last week defied the minority government and decided to force Statoil ASA (STL) and other producers to prepare to power North Sea developments from land, raising costs and potentially delaying the projects. That comes after last year’s surprise tax increase on oil output.

“Twice in a year, the framework for how oil companies operate has been changed,” said Erling Kvadsheim, head of licensing policy at the Norwegian Oil and Gas Association, a lobby group that represents groups such as Statoil, BP and ExxonMobil. “This can make projects less profitable, because you have to include political risk in your calculations, and makes marginal projects less attractive.”

Source: Bloomberg

Published: May 27, 2024