In his award-winning standard book on the world history of oil, The Prize: The Epic Quest for Oil, Money, and Power, author Daniel Yergin describes the discovery of oil and gas in the North Sea as the “biggest play” so far in the history of petroleum and, from an energy-strategy viewpoint, a discovery that was more significant than the finds in the Middle East, South America and Alaska.
A comparison of this kind may appear somewhat dubious today, since there is no doubt at all that the world’s largest oil reserves are to be found in the areas around the Persian Gulf. These are the regions that will guarantee future supplies of this vital raw material.
At the same time, it is a fact – and one that substantiates Yergin’s words – that, in as early as 1978, it was said in Organization of the Petroleum Exporting Countries (OPEC) circles that Norway would become one of the world’s most important marginal producers of oil.
An observation of this kind really conceals what it underlines: that the North Sea and the Norwegian continental shelf are synonymous with oil and gas in Europe. This applies, in particular, to the Norwegian sector of the North Sea, since Norway exports 90% of its entire oil production.
Today, Norway sits on approximately half of the remaining reserves of oil and gas in Europe. It covers 10% of Europe’s gas consumption and, within a few years, will increase gas exports dramatically and account for 30% of European gas imports.
Norwegian gas pipelines go from the North Sea and the Norwegian Sea to England, Germany, Belgium and France. Norway is the world’s biggest operator of submarine gas pipelines and is now preparing to meet the challenge that the liberalisation of the gas markets in Europe will present.
Long-term commitment is what characterises Norway as a gas supplier to Europe. The new century has been dubbed ‘the gas century’. In 2020, gas will outstrip oil as the major money-maker in the Norwegian oil and gas industry.
Norway is now preparing the development of the Ormen Lange field, a major gas field situated at a depth of 1,200 metres in the North Sea. This extends the gas perspective northwards on the Norwegian continental shelf. An even more extended perspective includes the Barents Sea – the arctic part of the Norwegian shelf. Exploratory drilling was scheduled to be resumed in the Barents Sea in the summer of 2001, after a six-year halt in operations. Plans are also in hand to develop the Snøhvit field on the Tromsøflaket off north Norway, bringing the arctic petroleum perspective even closer.
For 30 years, Norway and Russia have been negotiating the issue of the so-called delimitation line in the Barents Sea. When President Boris Yeltsin visited Norway in 1996, he linked the delimitation line negotiations to the possibility of a petroleum co-operation between the two countries in the Barents Sea, a possibility for which both countries have already found a practical basis. What the extent of such a co-operation will be remains to be seen, but there is no doubt that significant finds of gas have already been discovered on the Russian side of the Barents Sea, while Norway again pushes forward on what can be termed the ‘front line’ of the Norwegian shelf.
The North Sea became a third major oil producer in the world almost exactly two years after the huge Prudhoe Bay reserves were found in Alaska. These formed a significant counterweight to the dominance of the Middle East on an oil market that was in dramatic growth on account of the enormous increase in motoring and aviation in the 1950s and 1960s.
The development of the petrochemicals industry, which converted the oil molecule in ever-shifting combinations into clothes, food and fertilisers, added to the value of oil as a raw material of importance for energy and trade strategies. Oil became a global force in itself. E F Schumacher, the author of Small is Beautiful, wrote that there is no substitute for oil. Though energy can be bought and sold like any other type of goods, it is not a commodity like any other but a fundamental requirement for other goods – a basic ingredient on a par with air, soil and water.
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