CountryAAH, the total population in Norway is 5,421,252 people in 2020. Norway got a new heir in January, when Crown Princess Mette-Marit gave birth to a girl named Ingrid Alexandra.
At the beginning of the year, Norwegian police arrested
the Islamist leader Mulla Krekar from Iraq, who with his
family had taken asylum in Norway for a long time. The Kurdish
Islamist was charged with involvement in murder trials in
northern Iraq. Krekar has been considered a leader of the
Ansar al-Islam organization and was designated - albeit
without evidence - in connection with the 2003 Iraq War as a
link between al-Qaeda and Iraqi dictator Saddam Hussein. In
the early summer, the preliminary investigation against
Mullah Krekar was closed, after the police failed to
interrogate witnesses in Iraq.
The government decided to take home the Norwegian
engineering troops from Iraq at the turn of the year. The
decision was justified by Norway having to prioritize its
involvement in NATO operations in Afghanistan. Foreign
Minister Jan Petersen denied that the increased violence in
Iraq had affected the government's position, which remained
firm despite the United States' appeals for an extension of
the Norwegian operation. The NATO country Norway did not support
the US-led invasion of Iraq in 2003, but sent 180 engineer
troops to help rebuild southern Iraq.
The Conservative government party Høyre changed its
leader in May, when Foreign Minister Jan Petersen was
replaced by the Prime Minister, Erna Solberg. She declared
herself willing to be the right-wing leader who brought
into the EU. The coalition government between Prime Minister
Kjell Magne Bondevik's Christian People's Party, Høyre and
Liberal Liberals disagrees with the EU issue and has a
so-called suicide clause, which means that the government is
dissolved if Høyre addresses the demand for Norwegian EU
In June, Bondevik reformed its government with the goal
of rejuvenation and modernization. Several ministries were
closed down or merged. Christian People's Party leader
Dagfinn Høybråten was named super-minister in the new
Ministry of Labor and Social Affairs, which was also
expanded with parts from other ministries. Høybråten had
received a lot of criticism for moralism, but the smoking
ban he was behind as former health minister and which came
into force in June was supported by a majority of the
people. Norway became the second country in the world after
Ireland to ban smoking in all restaurants, bars and cafes.
The smuggling of wood spirits continued to harvest death
victims in Norway During the year, the police seized 25,000
liters of wood liquor and arrested two men who were later
charged with nine and three poison murders, respectively.
One of them, a 75-year-old, was suspected of engaging in
liquor smuggling since the 1940s and becoming a millionaire
in that way. The wood spirits must have been brought in from
above all Portugal
In August, three armed and masked robbers entered the
Munch Museum in Oslo and stole the artist Edvard Munch's
famous paintings "Skriet" and "Madonna". A female guard was
threatened with a gun to the tempest and panic arose among
visitors who thought it was all a terrorist act.
Norway received threats during the year from what was
assumed to be the al-Qaeda terror network. The record high
oil prices caused the state's petroleum fund to increase to
more than SEK 1,000 billion during the year.
Trends in business and class structure
Some believe that Denmark is no longer a class society,
that there is no longer a distinction between rich and poor,
and that everyone has the same opportunities. In order to
kill this claim, the list of the 10 richest Danes is
||Wealth (DKK billion)
|Maersk McKinney Møller
|The Families Can Rasmussen
|The Kirk Kristiansen family
|The Clausen family
|The Due Jensen family
|Lived after Herman Salling
|The Holc Povlsen family
|The Louis-Hansen family
|Denmark's 9 richest persons and
families (2006). Wealth in billions and the company
where the workers have created this wealth. (Stock
Exchange News Magazine)
Under the bourgeois VKO government, the richest have
become rapidly richer. In 2006, 59 Danes and Danish
families were billionaires.
As Figure 1 above illustrates, there has been a
continuing emigration from agriculture and a corresponding
expansion of employees in crafts and industry. Figure 2
illustrates the expansion in employment during the period
1970-95. Agriculture continues to decline dramatically, but
also in trade, construction and manufacturing, employment
has declined: from 49% of total employment in 1970 to 37.6%.
This development reflects the development of productivity in
special industries and construction. The decline would have
been even greater had it not been for the strong increase in
exports during the same period. More on this later.
The decline was offset by a correspondingly sharp
increase in public employment, which increased from 19% to
32.7% during the period. In terms of manpower, it was almost
a doubling. But also the private service business has
progressed during the same period.
Developments in the labor market over the past 20-25
years have helped to further divide the working class. Not
only are its traditional political parties' political
projects in crisis (this applies to both the Socialist
capitalist welfare state model and the left-wing socialism).
Economic developments also create even more fractures, and
it is only on rare occasions such as during the 1998 major
conflict that the contradictions for shorter periods can be
reduced and joint footings can be created. The working
class, therefore, despite a high organizational percentage,
is weakly opposed to the bourgeoisie's continued offensive.
In frustration, especially the most marginalized sections
of the working class respond by blaming the development on
refugees and immigrants, throwing themselves into the arms
of xenophobic parties such as the Danish People's Party.
This development of rising racism in Danish society is
further fueled by the media's treatment of the problem and
the crisis in general. Furthermore, it is pushing the entire
political agenda - and especially the Social Democracy - in
an increasingly xenophobic direction.
Tempo restrictions are lifted
For some Norwegian companies, the transition to more open
competition was difficult, but most were successful.
Foreign-owned supplier companies largely used Norwegian
engineers and workers when they took on assignments on the
Norwegian continental shelf. Many Norwegian-owned companies
secured significant assignments abroad. The most important
reason for the success of most people was probably because
all restrictions on limiting the pace of the oil sector were
lifted. There were several assignments for everyone.
Immediately after the Storting's decision in February
1988 to set an investment ceiling, a sharp fall in prices
was experienced in the Norwegian real estate market. This
led to a serious crisis in the Norwegian financial sector.
Many banks had to be taken over by the state. The crisis led
to considerable unemployment in Norway. Growth in the
Norwegian oil sector thus became an important tool for
getting the Norwegian economy back on track.
When oil production in the time that followed increased
sharply, it was due to several factors. New technology was
developed that made it possible to extract more oil and gas
from fields than previously expected. The 1990s became a
breakthrough for advanced underwater technology, moving from
solutions that had previously used divers to assemble and
operate equipment, to automated solutions such as
remote-controlled underwater vehicles (ROVs).
The most important thing was to give up all attempts to
slow down the development. In 1993, investments had risen to
NOK 57 billion. This was more than double the investment
ceiling set in 1988. The total oil and gas production in
2000 reached 280 million oil equivalents. The scale had
changed somewhat, but it corresponded to about three times
the ceiling set by the Storting in 1974.
New organization of ownership
Although there was considerable political agreement to
establish a strong state oil company, early fears arose that
Statoil would become too dominant. As prime minister, Kåre
Willoch made several attempts to curb Statoil's dominant
role. In his autobiography, Willoch later shows that Statoil
had significant influence over his own party as well. On the
left, too, many Statoil's dominance was considered
problematic. In the spring of 1984, the parties to the
Storting reached a settlement that stripped the company's
extensive ownership rights. The state's involvement in the
oil business was divided in two. As before, one part was
controlled by Statoil. The second part, the State's direct
financial involvement in the oil business (SDFI) was, as the
title suggests, controlled directly by the state.
The SDFI became an effective instrument for collecting
oil interest to the nation. The SDFI's holdings were
particularly concentrated in the fields where revenue was
expected to be particularly large. Until 2001, the SDFI
acted as a state holding company, with no operational
activities, governed by a small administration - in practice
a small office in the Ministry of Petroleum and Energy.
Around 2000, the SDFI managed oil reserves about three times
as much as Statoil.
Statoil continued to grow as an operating company,
although the company was not given the same advantages in
concession awards as in the 1970s. In 1990, under the
leadership of Harald Norvik, Statoil entered into a
strategic alliance with BP. The companies were to operate
together in a number of exploration areas internationally.
Together with BP, Statoil secured holdings in important
fields in countries such as Azerbaijan, Angola and Nigeria.
Internationalization was partly a response to a recognition
that production on the Norwegian continental shelf was
approaching a historic peak. At the same time, opportunities
were opened internationally after a number of nations opened
up to international companies following the collapse of the
Also for the Norwegian supplier industry, a turn towards
international markets was a response to the special
situation that prevailed around 1990. With the opening for
international investment that followed the EEA agreement, a
number of Norwegian companies were acquired by foreign
companies. Norwegian companies such as Aker, Kvaerner and
Smedvig responded by acquiring companies in the UK, Asia and
When BP merged with the US oil company Amoco in 1998, the
company broke off cooperation with Statoil. At this time,
Statoil was involved in several international projects on
its own. Low oil prices led to many projects failing. The
same low prices combined with unfortunate international
acquisitions contributed to the bankruptcy of the private
Norwegian oil company Saga Petroleum. Most of Saga was taken
over by Norsk Hydro. Statoil took over the operation of the
Snorre field. On the supplier side, Kvaerner experienced
problems due to similarly unsuccessful international
acquisitions. Kvaerner was taken over by Aker.
Privatization, Petoro and merger
In 1999, Statoil launched plans to privatize the company.
An important reason was the desire to be more flexible in
investing internationally. The Board of Directors proposed
that Statoil should again take over the SDFI to have a
stronger capital base to expand internationally. The
proposal for a partial privatization of Statoil received the
necessary support in the Storting on April 26, 2001.
Up to 1/3 of Statoil's share capital could be traded
freely on the stock exchange. The proposal that Statoil
should take over the SDFI was rejected. Admittedly, both
Statoil and Norsk Hydro were able to buy a small share of
the SDFI, but in practice the SDFI was strengthened by being
removed from the Ministry and established as a separate
state holding company under the name Petoro. The
headquarters were added to Stavanger.
Petoro had no operational responsibility. In terms of
reserves and revenues, the company was far larger than
Statoil. In 2008, Petoro's best year, the company alone
accounted for NOK 158.8 billion of the state's total oil
revenues. 239.6 billion came from taxation of the companies,
only 16.9 billion was from Statoil-Hydro.
In 2007, Statoil's dominance as operator on the Norwegian
continental shelf had increased further as a result of the
company merging with Norsk Hydro's oil segment. Following
the merger with Hydro, the state owned about 67 percent of
the shares in the company. The remainder was distributed to
private Norwegian and foreign shareholders. The company was
named StatoilHydro until 2009 when the merged company took
the name Statoil. In 2019, Statoil changed its name to
Equinor. The company justified the change of name in that it
would be a driving force in the reorganization of the energy
systems and that a change of name reflected the company's
strategy of becoming a broad energy company.
Production decline and international success
The 2000s started with a minor crisis for the Norwegian
oil industry. Oil and gas production on the Norwegian Shelf
was greater than ever, but many Norwegian oil suppliers
struggled as a result of low oil prices. The problems of
Saga Petroleum and Kvaerner were part of this crisis.
However, from 2002/2003, oil prices began to rise. At the
same time, the Norwegian authorities implemented several
expansive measures to keep up the activity on the Norwegian
continental shelf. In 2003, the Ministry of Petroleum and
Energy introduced a new and far more frequent allocation
scheme for "mature" areas (allocations in predefined areas
APA). Here, the bureaucratic and political processing of
applications was far less complicated. A scheme was
introduced in which oil companies could more or less freely
trade already allocated shares in blocks. The opening did
not only apply to established oil companies.
The Norwegian Petroleum Directorate followed up with a
process whereby new companies were "prequalified" to own and
sell shares on the Norwegian continental shelf. At the same
time, the Directorate opened for a somewhat smaller, but
growing group of companies to be accepted or qualified as
operators. Exploration activities were stimulated by the
favorable deduction schemes for exploration activities also
being made applicable to companies without income. In
practice, this meant that companies were paid money from the
state in accordance with what they would have received in
deduction if they had had income.
Norwegian oil production reached its historic peak in
2000 of 181 million Sm³ of oil equivalents. In 2004, total
petroleum production (oil, gas, condensate, NGL) reached a
peak of 264 million Sm³ of oil equivalents. By this time,
however, oil production had begun to fall sharply.
As production fell, investment rose sharply. In 2012, a
total of NOK 200 billion was invested in Norwegian oil
operations. Converted to NOK 1988, this was an investment
level that was more than three times the level that the
Storting had set as a ceiling in 1988. At this time, the
investments were not only related to activity on the
Norwegian continental shelf. The international turnover of
Norwegian supplier companies was now higher than what the
total Norwegian turnover had been around the year 2000.
Norwegian oil economy
Norway had the advantage of being close to large markets
and of political stability. This made Norwegian oil and gas
more attractive than the production that came from many
major producer countries in other continents and with
politically unstable regimes.
When Norway established the goal of a moderate recovery
rate in the 1970s, it was partly to prevent what economists
later termed as Dutch sick. That is, a situation where a
suddenly large source of income linked to a natural resource
can increase the cost level in general in society, thus
weakening competition to other competitive industries.
When Norway changed the policy when it came to limiting
the pace of recovery in the early 1990s, it was because the
establishment of an oil fund was meant to cover the same
function. The Government Petroleum Fund was established as
early as June 22, 1990, but the first deposits came only in
1997. The combination of what was initially a high
production and oil prices that rose far more sharply than a
fall in production, led to a sharp growth in transfers to
Up until the mid-1990s, oil revenues had mostly been used
to pay for the investments that had to be made. The
development of the oil fields, continued exploration
drilling, as well as the development of pipelines for the
transport of oil and gas to the continent had required large
investments for the companies involved.
The Norwegian authorities had invested in the development
of Norwegian administration, security, education and other
public services. In 2000, the Stoltenberg government
introduced a so-called rule of action that placed
restrictions on the proportion of the fund that could be
consumed. The purpose was to prevent overheating of the
However, in the years following the financial crisis, the
sharp growth in investment in the oil sector was so great
that many economists talked about a two-part economy and
that despite the intentions, Norway was hit by " Dutch sick
". Norway was then the world's third largest exporter of
both oil and gas. In the years between 2000 and 2014, Norway
had a gross domestic product (GDP) that was at the top in
Falling oil prices in the fall of 2014, together with a
fall in oil production, led Norway to fall to fourth place
in GDP in Europe and to a tenth place among the world's oil
producers. However, gas production continued to increase,
and the petroleum industry is still the largest industry in
Norway and, according to the national accounts, contributed
over 21 per cent of GDP in 2019.
In 2020, the state expected oil revenues to contribute
around NOK 273 billion to the Treasury, but a sharp fall in
oil prices in the spring of 2020 sent the price down from
over $ 60 a barrel to below $ 20 a barrel. The fall in oil
prices was due to two factors. Firstly, there was already
too much oil in the market, which was further strengthened
when the corona pandemic hit in March 2020. The world's oil
consumption dropped significantly and supply was far greater
than demand. The Opec countries and Russia therefore signed
an agreement on production cuts. In an attempt to help
stabilize an oil market in crisis, Norway also contributed
to production cuts. At the end of April, the Ministry of
Petroleum and Energy announced a cut of 250,000 barrels of
oil per day in June and 134,000 barrels per day for the rest
of the year.
The idea of a Norwegian oil fund arose in the 1960s
when Gerhardsen and his government declared sovereignty over
the Norwegian continental shelf. This laid the foundation
for an oil policy based on strong governance, in which the
Storting drafted the guidelines for long-term management of
our oil and gas resources.
From the beginning, it was clear that the petroleum
activities would have a limited duration. In order to ensure
that the income could also benefit future generations, an
oil fund was established in 1990. It first had the name of
the Government Petroleum Fund and changed its name to the
Government Pension Fund Global in 2006. The oil fund was to
be a buffer for government finances. Profits on the state
budget were transferred to the fund, while deficits were
covered by drawing on the fund. The fund is also a tool for
managing state financial challenges related to increased
pension payments and declining petroleum revenues. The fund
should therefore have a long-term perspective, but so that
it could be used when needed.
From the beginning of the 2000s, most of the revenue was
used to build the fund. In 2019, the Oil Fund reached a
historic milestone by passing NOK 10,000 billion. At the
start of 2020, the value was NOK 10 088 billion. This
corresponds to almost NOK 1.9 million per capita. Norway
thus has a far greater financial freedom of action than any
other European state. Internationally, the Norwegian Oil
Fund is one of the few examples that a nation has managed to
manage petroleum revenues for the benefit of the community
and in a way aimed at safeguarding future generations.