Norway's trillion-dollar oil and gas trick that Australia missed

From the outset, Norway planned to maximise the long term benefit it gained from its oil and gas, unlike Australian politicians who are content with crumbs from the table.

Norway's trillion-dollar oil and gas trick that Australia missed

This story was originally published in The West Australian on 25 September 2017 with the headline "Oil, gas ‘ownership’ attitude nets Norway $US1 trillion in savings." © Peter Milne.

Norway’s savings from exploiting its oil and gas resources reached $US1 trillion this week, a staggering amount for a nation of just over five million people.

They have turned finite resources into lasting wealth by thinking long-term, being firm and taking charge.

Paul Cleary, an Australian journalist who studied what the Norwegians did for his book Trillion Dollar Baby, thinks a key to Norway’s success was their attitude.

“From the very beginning their mindset was we own this, this is ours, and we are going to control it, and we are going to get the maximum amount of economic benefit ... for our country,” he told a Committee for Economic Development of Australia lunch in Perth on Friday.

“In Australia, I don’t think we have the same attitude; we think ‘you can take it, give us some tax and royalties and a few jobs’, but we don’t have that sense of ownership.”

Dr Cleary said the Norwegian policy was to go slowly and maximise the local benefits. In contrast, in Australia mid last decade the debate was about how to spend the money as quickly as possible.

When negotiating with multinational oil companies the Norwegians knew what they wanted and were firm, Dr Cleary said.

When US oil giant Phillips had drilled 32 unsuccessful wells in the North Sea by 1969 and wanted to stop, the Norwegians not only insisted they continued but told Philips where to drill next.

The 33rd well discovered the giant Ekofisk field that may produce until the middle of this century.

State Treasurer Ben Wyatt, who was in the audience, said the Norwegians had the confidence to say they owned the resource and what the terms were to exploit them.

Main image: Norwegian scenery. Source: Vidar Nordli-Mathisen on Unsplash