As Europeans shudder at the mere thought of their household energy bills looming this winter, one of the continent’s richest countries - Norway - has been getting richer by the day.
Norway's oil and gas sector has seen record profits, with the government's Statistics Norway bureau saying that revenues from the country's natural gas exports reached Nkr128Bln ($13Bln) in July, 332.7 percent higher than in the same month last year.
Surging energy costs and inflation rates across the continent have been exacerbated by the decision of Brussels officials and individual countries to stop buying Russian oil, gas and coal as part of their sanctions against Moscow for its military operation in Ukraine.
The EU obtained as much as 40 percent of its gas from Russia before the Ukraine crisis. Norway - Europe’s most important supplier of gas, at present covers around a quarter of the total gas consumption in the EU and Great Britain.
6 September 2022, 10:13 GMT
‘Embarrassingly’ Richer
The Scandinavian country has been profiting from the situation and growing "embarrassingly" richer, a report in The Economist claims.
Supplying energy to Europe has always been tremendously lucrative for Norway. However, after Brussels and individual European countries unleashed attempts to curb Russia's energy exports to Europe, the ensuing power crunch sent huge sums flowing north, the publication reports. Norway is now forced to fend off charges of "war profiteering", the outlet claimed.
In a typical year, sales of oil, gas and electricity bring in more than $50Bln, or $10,000 per Norwegian, according to the report.
The volatile situation - triggered in a large part by self-harming restrictions on Russia - has caused Norway’s energy-export revenues to shoot up to approximately $200Bln a year, the report pointed out.
Norway has boosted gas output as much as possible, with the government even imposing a forced settlement in a dispute between striking offshore oil and gas workers and energy executives earlier this summer. Equinor, Norway's largest gas producer and the second-largest in Europe, initiated a safe shutdown of three oil fields because of the strike in July, with the Norwegian Oil and Gas Association warning at the time that an extension of the strike could affect almost 60 percent of gas exports.
Norway also funneled money to support Ukraine, with the government proposing to allocate roughly 1Bln euros (Nkr10Bln; $1Bln) to be distributed over 2022 and 2023, as funding for humanitarian assistance and budget support. Despite Norway also joining the sanctions imposed on Russia by the EU, the mood towards the country has soured as the energy crisis has worsened, according to the report.
‘Indirect Preying’
As consumers and businesses struggle with soaring costs, Europe is starting to grumble. Poland’s Prime Minister, Mateusz Morawiecki, was the first to voice his anger, asking why his country should be “paying Norway gigantic money for gas".
“… Four or five times more than we paid a year ago? This is sick. They should share these excess profits. It’s not normal, it’s unjust. This is indirect predation,” he fumed in May.
Others have been more circumspect, especially as Norway continues to insist that the present market pricing for gas should remain in place.
On 2 September, European Commission President Ursula von der Leyen said that the EU might limit the price of Russian natural gas after G7 finance ministers confirmed their intention to impose price caps on Russian oil as part of the expanded sanctions against Moscow. However, the EU’s energy ministers failed to reach a consensus, with member states which import large amounts of gas from Russia - including Hungary, Slovakia and Austria - speaking out against it.
"We are …sceptical about a maximum price on natural gas… A maximum price would not solve the fundamental problem, which is that there is too little gas in Europe," Norway's Prime Minister Jonas Gahr Stoere said.
Russia slammed the idea of imposing a price cap on its oil, warning that it would lead to a rise in prices.
On 12 September, Norway's Prime Minister Jonas Gahr Store and President of the European Commission Ursula von der Leyen spoke on the telephone about the energy crisis affecting Europe.
“From the outset, Norway has done all it can to alleviate the situation in Europe, and Norwegian companies have substantially increased their natural gas production. Norwegian gas supplies to Europe have risen by 8 percent since the start of the war,” the Gahr Store said.
He invited Norway-based gas producers to discuss the possibility of providing more long-term contracts.
The longer gas prices stay high, the more Norway will come under pressure to “share” some of its windfall with Europe, Georg Riekeles of the European Policy Centre think-tank was cited as saying.
12 September 2022, 14:25 GMT