Norway’s government has proposed changes to oil and gas industry regulations in a bid to curb the possibility of non-European companies buying oil and gas assets in the country. According to Bloomberg, the non-European companies from which Norway is seeking to protect its oil and gas come from Russia.
Europe’s biggest oil producer and gas supplier to the continent on par with Gazprom, is in the process of adjusting to some major changes in ownership of oil and gas assets prompted by the 2014 oil price crash. BP and Exxon, for example, have left Norway, and an influx of smaller independents—some backed by private equity—is taking their place.
Besides worry about the financial soundness of these new entrants into the Norwegian oil and gas industry, there is, when it comes to Russian entities, the more sensitive question of national security and the protection of information such as how its natural gas network operates.
What makes the situation all the more sensitive is the fact that Norway is prioritizing its trade relations with Russia and has already welcomed billionaire Mikhail Fridman, who in 2015 got the green light to buy stakes in 43 Norwegian oil and gas licenses, including fields run by Statoil and BP for a total consideration of US$1.6 billion.
Norway and Russia are partnering on exploration in the Arctic, where they share some offshore oil and gas deposits, with Statoil working together with Rosneft and Lukoil to explore these.
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Last year, Gazprom agreed to buy 38.5 percent in the Norwegian business of OMV, but according to a Reuters report from the time, the government was trying to get Gazprom to lower this to 25 percent.
Amid continuing tension between Moscow and Brussels, and economic sanctions against Russia imposed in the wake of the annexation of Crimea, the implications of Russian energy acquisitions in Norway are bound to cause some concern in the government. Now, the energy ministry has sent its proposal to other ministries and oil companies as part of a consultation process, which will expire early next month.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.