The defense is based on NATO membership. In 1993, a long-term, still valid defense decision was adopted in the light of prevailing uncertainties in security policy developments and the fact that, for example, The Russian Federation reduced its combat forces and nuclear capability considerably less in the north than in its other European parts. The decision means a continued concentration in Northern Norway and is based on general military duty with an initial service of 12 months. The defense comprises (2005) 26,000 men with 220,000 men in reserve and is peacefully organized in an army of 15,000 men, 99,000 men fully manned, with a brigade in high readiness grouped in northern Norway. To see related acronyms about this country, please check ABBREVIATIONFINDER where you can see that NOR stands for Norway.
During mobilization, a division of three brigades and three independent brigades is organized, one of which is in southern Norway. The Navy comprises 5,700 men, 28,000 men fully manned, with six submarines, three frigates and 15 patrol boats. The Air Force comprises 5,700 men, 30,000 men fully manned, with 61 fighter aircraft, primarily F-16s, and extensive sea surveillance resources. The reserves amount to a total of 220,000 men, of which the home defense is 73,000 men. The equipment is modern by the standard NATO standard.
Norway is a member of NATO but does not allow the stationing of foreign troops or nuclear weapons in peace; heavy equipment for However, artillery units from the USA are pre-stored at Trondheim. NATO’s leadership organization has changed significantly after the fall of the Berlin Wall in 1989. Nowadays, the operational command center for Northern Europe is located in Norway. Defense costs (2005) amount to 1.7% of GDP. Norway participates in a number of international efforts, including in Afghanistan (150 men), in Bosnia and Herzegovina (125 men) and in Iraq (12 men).
- COUNTRYAAH: Do you know where is Norway on the world map? Come to see the location and all bordering countries of Norway.
At the end of the Napoleonic wars at the beginning of the 19th century, Denmark had to relinquish Norway to Sweden. In 1814 the Norwegians convened a constitutional assembly and proclaimed the country’s independence. Sweden responded by forcing its supremacy by force. However, despite the union with Sweden, most articles from the Constitution of 1814 remained in force. The Norwegian Constitution is thus one of the oldest in the world, surpassed only by the United States federal constitution. It is based on national supremacy, sharing power and inalienable human rights. With a constitutional change in 1884, the Norwegians introduced the parliamentary monarchy as a form of government. (See Swedish-Norwegian Union).
But the union with Sweden was very conflicted and in 1905 Norway finally gained its independence. The Danish prince Carl was elected king of Norway under the name Haakon VII. Until 1914, the country experienced high economic growth, and its hydropower plants provided the basis for significant industrial development. However, private Norwegian and foreign companies’ acquisition of waterfalls caused great concern to the population. In 1906, 75% of the nation’s hydropower plants belonged to foreign capital, and in 1909 Parliament passed laws protecting the country’s natural resources.
In 1898, ordinary voting rights for men were introduced and in 1907 and 1913 women were given the right to vote. During World War I, Norway tried to stay neutral, but the great powers forced it to interrupt trade with Germany. The antithetical sentiments in the population were strong. Especially due to a number of accidents caused by submarines. At the same time, workers were affected by price increases as a result of the war.
Between The Wars
One of the consequences of the industrialization of the country and the introduction of universal suffrage was the development of the Social Democracy (Labor Party). By the end of the war, the left had the majority, and unlike the social democracies of the other western European countries, it was decided in 1918 to join the Communist International (Comintern) when it was formed in the wake of the Russian revolution. Nevertheless, the party refused to submit to central government as required by the Soviet Communist Party, and in 1923 it withdrew from the Comintern again.
The interwar period was characterized by a number of economic problems and serious labor disputes. Despite a 20% unemployment rate in 1938, the period was nevertheless marked by aggressive industrial growth. In addition, the government implemented social legislation, national pension, the right to vacation and holiday pay, and unemployment insurance.
Like Denmark, Norway was invaded by Germany on April 9, but Norway surrendered only after two months of fighting against the force, and King Haakon and the government went into exile in London, from which the resistance struggle was coordinated. The country was liberated in 1945. Haakon died in 1957 and was succeeded by his son, Olav V.
Norwegian oil history
Norwegian oil history is about discovering and extracting petroleum on the Norwegian continental shelf from the 1960s until today.
When the Ekofisk field was declared a worthy little Christmas Eve in 1969, it marked the start of a new chapter in Norwegian history. Several discoveries followed, more fields were expanded and several fields were put into production. A number of the major international oil players established themselves, got licenses and invested. This followed extensive technological development in several areas and the establishment of educational and qualification measures. Public administration was strengthened with laws and regulations aimed at the petroleum industry. Norwegian industry and the shipping industry adapted to operations in the North Sea. In particular the restructuring within woe rftsindustrien, and in parts of the shipping pervasive.
The oil business became a dominant factor in the Norwegian economy and today is Norway’s largest industry in terms of value creation, government revenues, investments and export value. In 2016, 185,000 people were directly or indirectly employed in the petroleum sector in Norway.
The start of the oil and gas business in the North Sea
In 1959, after two dry wells were drilled, a large gas discovery was made at Groningen in the Netherlands. The discovery proved to be one of the largest gas deposits ever found in the world. Geologically, it was obvious that deposits could also exist in the North Sea. The US oil company ExxonMobil and the Dutch-British Shell had been involved in the discovery and later production from the gas field. Both companies had extensive international experience and soon afterwards started exploration activities off the coast of the Netherlands.
The Gulf of Mexico already had experience in exploration drilling and offshore production. The first drilling operations in the North Sea started with the same type of technology, but it soon became clear that conditions in the North Sea set different requirements.
The findings in the Netherlands caused the oil companies to contact the other North Sea countries to start exploration for oil and gas deposits off their coasts.
Trygve Lie had as a special assignment from the government to work to get foreign investment into Norwegian business, and the first request from the oil company came from Phillips on October 29, 1962.
The inquiry, which initially referred to permission to start seismic investigations, was forwarded to Jens Evensen in the Ministry of Foreign Affairs. By this time, oil and gas operations had already started outside both the Netherlands and the United Kingdom.
Norwegians had been involved in these areas as well. Denmark had granted the Danish company AP Møller, which operated together with the two major international oil companies Gulf and Shell, exclusive rights in oil extraction in the Danish sector. Phillips had also wanted such an agreement. However, the attitude in Norway was skeptical of such agreements. “The Act on Acquisition of Waterfalls, Mining and Other Real Estate,” which regulated ownership of Norwegian hydropower, was based on the principle that energy resources should be subject to Norwegian public control. There was also a long tradition that Norway would have control of the mining operations.
For all the North Sea countries, it was also clear that the ownership of the bottom of the North Sea had to be clarified. The coastal areas were not problematic, but the areas further out had to be cleared with agreements. On May 31, 1963, Norway declared that the seabed and its deposits were part of the Norwegian state high. Other North Sea countries declared the areas off their coasts as their areas and subject to their legal regulation. Denmark, Norway and the United Kingdom signed an agreement on sharing the continental shelf according to the centerline principle.
A royal resolution in force from April 9, 1965, came with a licensing rule, and four days later the first licensing round on the Norwegian continental shelf was announced. As a result, 22 production licenses were granted for 78 blocks. The licenses were granted to both individual companies and groups of companies.
The first exploration wells were drilled in 1966 by Esso with the American rig Ocean Traveler. But the first viable discovery first came in 1969. The discovery was made on the Ekofisk field by the sister rig Ocean Viking drilled for Phillips.
Overview of the 1970s
The development of the first large oil and gas fields on the Norwegian continental shelf was dominated by foreign companies. However, the authorities aimed to build up a Norwegian oil environment. A key instrument for strengthening the development of a Norwegian oil environment was the creation of Statoil.
Since its establishment in 1972, Statoil has played a leading role in the Norwegian oil business. The company received 50 percent of all new allocations for a period. Statoil’s mandate, size and strategies have been the subject of many controversies.
The authorities also wanted a competent Norwegian industry-related player for exploration, development and operation of the installations on the continental shelf, as well as processing of petroleum as a resource. The development of the oil supply industry has been characterized by both crises and success.
A key objective in the early Norwegian oil policy was a moderate oil pace to avoid becoming too dependent on the new resource. In the early 1990s, this goal was abandoned. In 2013, it was discussed how far too high an investment level would have made the Norwegian economy vulnerable.
As early as the 1970s, great emphasis was placed on the oil business being designed in an environmentally sound manner. In the 1970s, oil operations were concentrated in the areas south of Stad in the North Sea. From the 1980s, the business moved north to the Norwegian Sea and the Barents Sea. The oil industry faced resistance from environmental organizations and fishing interests who felt vulnerable areas should be protected from petroleum activities. In addition, there was concern about the consequences the climate challenges could have for an oil-dominated Norway.
In the early 1960s, Norway had a fishing border that stretched a modest twelve nautical miles (about 2.2 miles) off the coast. The rest was considered international waters. The fishing limits clarified the right to fish in the sea, not to seabed activity.
The basis of international law for clarification was the 1958 Geneva Convention on the Continental Shelf. The convention, which was based on a centerline principle, had a wording that the continental shelf should be confined to areas shallower than 200 meters deep. However, it also stated that the boundary could be expanded if it was possible to extract natural resources even deeper.
Foreign Ministry officials feared for a while that neighboring states would argue that the Norwegian continental shelf should be delimited by the Norwegian. On May 31, 1963, Norway unilaterally stated in a royal decree that the seabed and subsoil in the subsea areas off the Norwegian coast were subject to Norwegian statehood as far as exploitation and exploration of natural resources were concerned, and that a delimitation to neighboring states would be based on a centerline principle.
Such a unilateral declaration was dependent on acceptance from other countries, primarily neighboring states. The United Kingdom wanted an agreement as soon as possible, and on March 10, 1965, a split-line agreement between Norway and the United Kingdom was signed. The agreement was based on the centerline principle. Both the British and Norwegian coastlines were long, and with this the boundary was set in large parts of the North Sea. On December 8, 1965, an agreement with Denmark was also ready. With this, Norway had acquired jurisdiction over a proportion of the North Sea with an area that was almost as large as the Norwegian mainland.
There was still much that had to be clarified in international sea law. Further north, it would take many years before all important divisions were clarified. The decisive factor for Norway was that they had obtained sufficient clarification to start negotiations with the oil companies who wanted to start exploration in what was the Norwegian part of the North Sea.
The licensing system
By the resolution of 31 May 1963, the Norwegian state had become the owner of possible natural deposits on a large part of the continental shelf in the North Sea. The next step was to design suitable legislation and regulations for possible activities on the shelf. Work on this was added to the newly created Continental Shelf Committee chaired by Jens Evensen.
Norway advocated the same system as the United Kingdom, where groups of companies were allocated shares in advertised blocks. The Norwegian blocks were squares of around 500 km², calculated from latitudes and longitudes.
The state’s revenue should come in the form of taxes and possibly direct shares of the produced oil (royalty) after production started. Many of the formulations that were incorporated into what was to become a foundation wall in the Norwegian licensing regime, Royal Resolution of April 9, 1965, were designed in close collaboration between Jens Evensen and representatives of the foreign oil companies.
Despite the great interest in getting drilling started, there was no public debate on the first oil policy. Initially, the Storting was only involved when a special tax relief for oil companies was passed by the Act of 11 June 1965. The law was passed after a very brief debate. It was pointed out that if a tax cut were not adopted, the state would not be able to operate with a royalty in the agreement with the companies. The alternative that was set up was that the industry was not willing to invest at all.
Both in the Royal Resolution and in the labor agreements the companies had to sign in order to be awarded licenses, there are provisions that guarantee the state a sovereign right to intervene regulatively against the companies’ practices at a later date. The resolution contained no security provisions, but stated that if the state were to appoint inspectors, the companies had to give them full access and comply with the orders they had to give (section 45).
There were several similarities to the type of licensing regime that was developed in connection with the development of hydropower in the early 1900s. The principle of the right of return was incorporated into several provisions. Initially, production licenses were granted for a period of six years. Already after three years, the companies committed to give up a quarter of the allocated block (§ 20). Given that the companies would retain an allocated block after a six-year period, three years after that, they had to divest another quarter of the original allocation. Those parts of a block that were retained after an extended allocation could be retained for a full 40 years (§ 22).
In the negotiations preceding the Royal Resolution and the final allocations, the companies were most concerned about the financial conditions. The companies expected a 12.5 percent royalty, as was the case in the United Kingdom. But Evensen made it 10 percent.
Royalty is a tax which means that the state receives a certain percentage of the production value, not as for the taxes; a percentage of profits. From a producer’s point of view, therefore, it was a potent source of income. A 2.5 percent reduction in royalty was worth more than a corresponding reduction in taxes.
As early as April 13, 1965, four days after the Royal Decree and before the final clarification of the tax issue, the oil companies were invited to apply for a license to operate oil on the Norwegian continental shelf. Prior to the allocation, the Storting adopted exemption provisions that provided reduced taxes for oil companies. Most satisfied were the American companies. They were exempted from a provision requiring the participating companies to establish Norwegian subsidiaries. With current US tax rules, this meant that all expenses for exploration on the Norwegian continental shelf could be deducted from the tax in the USA.
Although Evensen ran an active game to solve the oil case through the administration, there are no indications that he broke with the overall assumptions of his political clients. The overall objective was to get the foreign companies to engage as much as possible. Thus, the probability of really finding oil would be greatest.
At the same time, they were concerned with securing access to foreign currency, and preventing foreign currency from disappearing out of Norway. If Norwegian oil companies were to account for much of the activity, they would have to depend on hiring foreign specialty companies with oil technology expertise.
A small but significant group of Norwegian companies wanted to focus on oil exploration in the North Sea right from the start. This included Fred. Olsen and Norsk Hydro. These felt the interest from the foreign companies was an indication that the opportunity for discoveries was good. But without special expertise, they depended on entering into an alliance with the foreign companies.
However, Jens Evensen signaled to several large foreign oil companies that an alliance with Norwegian companies would not strengthen their application. All in all, Norwegian participation in the licensing round was small, not least compared to the first allocation on the British side of the North Sea.
Without access to independent oil expertise and limited investment funds, Norway’s position in the 1960s was very reminiscent of the many poor countries with potential petroleum resources in the south.