Conflict surges Norway’s oil, fuel revenue. Now, it is urged to assist | Govt. & Politics

STAVANGER, Norway (AP) — Europe’s frantic seek for options to Russian vitality has dramatically elevated the demand — and worth — for Norway’s oil and fuel.

As the cash pours in, Europe’s second-biggest pure fuel provider is warding off accusations that it is making the most of the battle in Ukraine.

Polish Prime Minister Mateusz Morawiecki, who’s seeking to the Scandinavian nation to exchange a number of the fuel Poland used to get from Russia, mentioned Norway’s “gigantic” oil and fuel earnings are “indirectly preying on the war.” He urged Norway to make use of that windfall to help the hardest-hit international locations, primarily Ukraine.

The feedback final week touched a nerve, at the same time as some Norwegians wonder if they’re doing sufficient to fight Russia’s battle by growing financial support to Ukraine and serving to neighboring international locations finish their dependence on Russian vitality to energy business, generate electrical energy and gas automobiles.

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Taxes on the windfall earnings of oil and fuel firms have been widespread in Europe to assist individuals deal with hovering vitality payments, now exacerbated by the battle. 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 in every of Europe’s richest international locations, dedicated 1.09% of its nationwide earnings to abroad improvement — one of many highest percentages worldwide — together with greater than $200 million in support to Ukraine. With oil and fuel coffers bulging, some want to see much more cash earmarked to ease the results of the battle — and never skimmed from the funding for companies that help individuals 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 arrange 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 vitality 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, instructed the World Economic Forum assembly in Davos, Switzerland.

Russia has halted pure fuel to Finland, Poland and Bulgaria for refusing a requirement to pay in rubles.

The 27-nation European Union is aiming to scale back reliance on Russian pure fuel by two-thirds by 12 months’s finish by way of conservation, renewable improvement and different provides.

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 vitality 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 tasks, 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.

Combined with high energy prices, the incentives that run out at the end of the year have prompted companies in Norway to issue a slew of improvement plans for new oil and fuel tasks.

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.

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