Monday, June 27, 2022

The war increased Norway’s oil, gas profits. Now, it’s urged to help

STAVANGER, Norway ( Associated Press) — Europe’s frantic search for an alternative to Russian energy The demand and price of Norway’s oil and gas has increased dramatically.

As money pours in, Europe’s second-largest natural gas supplier is dismissing allegations of profiting from the war in Ukraine,

Polish Prime Minister Mateusz Morwiecki, who is looking to the Scandinavian country to replace some of the gas Poland is getting from Russia, said Norway’s “huge” oil and gas gains are “indirectly a victim of war.” He urged Norway to use that windfall advantage to support the hardest-hit countries, mainly Ukraine.

The comments last week touched a nerve, even as some Norwegians wonder whether they are trying to counter Russia’s war by increasing economic aid to Ukraine and helping neighboring countries end their reliance on Russian energy. are doing enough. for the power industryGenerate electricity and fuel vehicles.

Taxes on windfall profits from oil and gas companies are a common practice in Europe to help people deal with rising energy bills.Now the war has become worse. Spain and Italy both approved them, while the government of the United Kingdom plans to introduce a, Moraviki is asking Norway to go further by sending oil and profits to other countries.

Norway, one of Europe’s wealthiest countries, committed 1.09% of its national income to foreign development – one of the highest percentages worldwide – including more than $200 million in aid to Ukraine. oil and gas treasury Bulging out, some would like to see even more funding to ease the effects of the war – and not be skimmed by money for agencies that support people elsewhere.

“Norway has made dramatic cuts to most UN institutions and support for human rights projects to finance the cost of receiving Ukrainian refugees,” said Berit Lindemann, policy director of the Norwegian Helsinki Committee’s human rights group.

He helped organize a protest outside parliament in Oslo on Wednesday, criticizing government priorities and saying the Polish remarks had “some merit”.

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“It looks really ugly when we know that earnings have skyrocketed this year,” Lindemann said.

oil and gas prices were already high amid the lack of energy and has become edgy because of the war. Natural gas is trading at three to four times the same period last year. International benchmark Brent crude oil burst through $100 a barrel after the attack three months ago and has rarely dropped below that since.

Norwegian energy giant Equinor, which is state-owned, posted earnings four times higher in the first quarter than in the same period last year.

The bounty led the government to revise its forecast for revenue from petroleum activities this year to 933 billion Norwegian kroner ($97 billion) – more than three times that earned in 2021. The vast bulk will be funneled into Norway’s massive sovereign wealth fund – the world’s largest – to support the country when oil dries up. The government is not contemplating to divert it elsewhere.

Norway has “provided substantial support to Ukraine since the first week of the war, and we are preparing to do more,” Secretary of State Evind Vad Petersen said by email.

He said the country had sent financial aid, weapons and more than 2 billion kronor in humanitarian aid “independent of oil and gas prices”.

Meanwhile, European countries are scrambling to diversify their supplies away from Russia to help prop up Norwegian energy prices., He has been accused of helping the war by continuing to pay for Russian fossil fuels.

That energy dependence “provided a tool to intimidate Russia and use it against us, and this is now clearly demonstrated.”NATO Secretary General Jens Stoltenberg, former Prime Minister of Norway, said at the World Economic Forum meeting in Davos, Switzerland.

Russia withholds natural gas to FinlandPoland and Bulgaria to refuse demand to pay in rubles,

EU of 27 countries aims to reduce dependence on Russian natural gas up to two-thirds by the end of the year Through conservation, renewable development and alternative supply.

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Europe is pleading with Norway, along with countries like Qatar and Algeria, to help make up for the deficiency. Norway distributes 20% to 25% of Europe’s natural gas, compared to 40% of Russia’s before the war.

It is important for Norway to be “a stable, long-term provider of oil and gas to European markets”, said Deputy Energy Minister Amund Vik. But companies are selling in volatile energy marketsand “with high oil and gas prices” As seen since last fall, companies have produced daily which can produce maximum in their area,” he said.

Nevertheless, Oslo has answered the European call for more gas this year by granting permits to operators to produce more gas. Tax incentives mean companies are investing in new offshore projectsWith a new pipeline to Poland Opening this fall.

“We are doing everything we can to become a reliable supplier of gas and energy to Europe in difficult times. It was a tight market last fall and there is even more pressure now,” said Equinor spokesperson Ola Morten Anstedt. .

The situation is a far cry from June 2020, when prices crashed in the wake of the COVID-19 pandemic and Norway’s previous government issued tax incentives to oil companies to increase investment and protect jobs.

Incentives due to expire at the end of the year, along with higher energy prices, have prompted companies in Norway to issue several development plans. for new oil and gas projects,

Yet those projects will not produce oil and gas until the end of this decade or even further into the future, when the political situation may be different and many European countries are hoping to shift most of their energy use to renewable energy. .,

Until then, Norway may be facing the more familiar criticism – that it is contributing to climate change.

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Associated Press reporter Monica Sislowska in Warsaw, Poland contributed.

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