STAVANGER, Norway (AP) — Europe’s frantic seek for options to Russian power has dramatically elevated the demand — and worth — for Norway’s oil and gasoline.
As the cash pours in, Europe’s second-biggest pure gasoline provider is heading off accusations that it is making the most of the struggle in Ukraine.
Polish Prime Minister Mateusz Morawiecki, who’s trying to the Scandinavian nation to switch among the gasoline Poland used to get from Russia, mentioned Norway’s “gigantic” oil and gasoline earnings are “indirectly preying on the war.” He urged Norway to make use of that windfall to assist the hardest-hit international locations, primarily Ukraine.
The feedback final week touched a nerve, whilst some Norwegians wonder if they’re doing sufficient to fight Russia’s struggle by rising financial support to Ukraine and serving to neighboring international locations finish their dependence on Russian power to energy business, generate electrical energy and gasoline automobiles.
People are additionally studying…
Taxes on the windfall earnings of oil and gasoline corporations have been frequent in Europe to assist folks deal with hovering power payments, now exacerbated by the struggle. Spain and Italy each accepted them, whereas the United Kingdom’s authorities plans to introduce one. Morawiecki is asking Norway to go additional by sending oil and earnings to different nations.
Norway, one among Europe’s richest international locations, dedicated 1.09% of its nationwide revenue to abroad improvement — one of many highest percentages worldwide — together with greater than $200 million in support to Ukraine. With oil and gasoline coffers bulging, some wish to see much more cash earmarked to ease the consequences of the struggle — and never skimmed from the funding for companies that assist folks elsewhere.
“Norway has made dramatic cuts into most of the U.N. institutions and support for human rights projects in order to finance the cost of receiving Ukrainian refugees,” mentioned Berit Lindeman, coverage director of human rights group the Norwegian Helsinki Committee.
She helped set up a protest Wednesday outdoors Parliament in Oslo, criticizing authorities priorities and saying the Polish remarks had “some merits.”
“It looks really ugly when we know the incomes have skyrocketed this year,” Lindeman said.
Oil and gas prices were already high amid an energy crunch and have spiked because of the war. Natural gas is trading at three to four times what it was at the same time last year. International benchmark Brent crude oil burst through $100 a barrel after the invasion three months ago and has rarely dipped below since.
Norwegian energy giant Equinor, which is majority owned by the state, earned four times more in the first quarter compared with the same period last year.
The bounty led the government to revise its forecast of income from petroleum activities to 933 billion Norwegian kroner ($97 billion) this year — more than three times what it earned in 2021. The vast bulk will be funneled into Norway’s massive sovereign wealth fund — the world’s largest — to support the nation when oil runs dry. The government isn’t considering diverting it elsewhere.
Norway has “contributed substantial support to Ukraine since the first week of the war, and we are preparing to do more,” State Secretary Eivind Vad Petersson said by email.
He said the country has sent financial support, weapons and over 2 billion kroner in humanitarian aid “independently of oil and gas prices.”
European countries, meanwhile, have helped inflate Norwegian energy prices by scrambling to diversify their supply away from Russia. They have been accused of helping fund the war by continuing to pay for Russian fossil fuels.
That power reliance “provides Russia with a tool to intimidate and to use against us, and that has been clearly demonstrated now,” NATO Secretary-General Jens Stoltenberg, a former prime minister of Norway, informed the World Economic Forum assembly in Davos, Switzerland.
Europe is pleading with Norway, along with countries like Qatar and Algeria, for help with the shortfall. Norway delivers 20% to 25% of Europe’s natural gas, vs. Russia’s 40% before the war.
It is important for Norway to “be a stable, long-term provider of oil and gas to the European markets,” Deputy Energy Minister Amund Vik said. But companies are selling on risky power markets, and “with the high oil and gas prices seen since last fall, the companies have daily produced near maximum of what their fields can deliver,” he mentioned.
Even so, Oslo has responded to European calls for more gas by providing permits to operators to produce more this year. Tax incentives mean the companies are investing in new offshore initiatives, with a brand new pipeline to Poland opening this fall.
“We are doing whatever we can to be a reliable supplier of gas and energy to Europe in difficult times. It was a tight market last fall and is even more pressing now,” said Ola Morten Aanestad, a Equinor spokesman.
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 for oil companies to spur investment and protect jobs.
Yet those projects will not produce oil and gas until later this decade or even further in the future, when the political situation may be different and many European countries are hoping to have shifted most of their energy use to renewables.
By then, Norway is likely to face the more familiar criticism — that it is contributing to climate change.
AP reporter Monika Scislowska in Warsaw, Poland, contributed.
Copyright 2022 The Associated Press. All rights reserved. This materials is probably not printed, broadcast, rewritten or redistributed with out permission.