Sun, Mar 20, 2022 page12

• Ukraine war profits fuel unease in oil-rich Norway

  • By Pierre-Henry Deshayes / AFP, OSLO
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  One man’s loss might, at times, be another’s unfortunate gain, and the Ukraine conflict is proving a boon to some energy-producing nations as oil prices soar.

  The war has given an unexpected boost to Norway’s oil revenues and the country, concerned that it would be seen as a “war profiteer,” is mulling what to do with its sudden windfall.

  Fueled by the sanctions imposed on Russia after its invasion of Ukraine, the surge in oil and above all gas prices could see Norway racking up almost 1.5 trillion kroner (US$170 billion) in extra oil and gas revenue this year, Nordea Bank AB has said.

  

  People walk along a pedestrian zone in Oslo on Feb. 2.

  Photo: AFP

  Western Europe’s biggest oil and gas exporter, and already one of the richest countries in the world, Norway could pocket nearly 50,000 kroner more than expected every second of the day without even lifting a finger.

  However, the boon is giving it a guilty conscience.

  “There are times when it’s not fun to make money, and this is one of them, given the situation,” Norwegian Petroleum and Energy Minister Terje Aasland said in an interview with television channel TV2.

  Most of Norway’s oil revenue ends up in the state’s coffers — through taxes, dividends, and direct holdings in oil and gas fields — which it then places in its sovereign wealth fund, already the world’s biggest.

  The fund has suffered from the global stock market falls in the past few weeks, but is still worth about 11.5 trillion kroner, or more than 2 million kroner for each of Norway’s 5.4 million inhabitants.

  “Norway cannot escape the unpleasant fact: This is a form of war profit,” daily Dagbladet wrote in an editorial.

  “While Ukraine is being destroyed, and most other countries are mainly feeling the negative effects of the war, such as higher energy prices, higher food prices and general inflation, we are making a gain,” it said. “This must be reflected in the way we think about the use of money.”

  Many want to see a redistribution of all or part of the war gains.

  Norway’s Green Party has called for the billions of additional petrodollars to be placed in a “solidarity fund” to be used as a sort of Marshall Plan for various needs.

  It could be used to finance humanitarian aid and the reconstruction of Ukraine, help Europe reduce its dependence on Russian gas, and help the poorest countries counter soaring costs for energy and food, the party said.

  “The extra oil revenue from the war should go to Ukraine, not us,” it said.

  The center-left government has so far pledged “up to” 2 billion kroner in humanitarian aid to Ukraine.

  Norwegian Prime Minister Jonas Gahr Store has said that Norway can help most by supplying as much gas as possible to Europe to help reduce its dependency on Russia.

  Norway covers 20 to 25 percent of the EU’s and UK’s needs via a vast network of gas pipelines, compared with 45 to 50 percent for Russia.

  European Climate Pact ambassador Paal Frisvold suggested that Norway should forgo the “superprofits” and cap the price of gas sold to European countries, which are just emerging from the COVID-19 pandemic, some with heavy debts.

  “Our profits are the invoices of others,” he told reporters.

  “The most important thing is to show solidarity, to display leadership at a historic moment. My kids are going to ask me: Dad, what did Norway do during the Ukraine war? I don’t want to tell them that we made a killing,” he said.

  Norway’s government, which is drawing up its spring budget bill, said there was currently no plan for such a cap.

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