Europe’s frantic search for alternatives to Russian energy sources has increased demand and prices for Norwegian oil and gas
Europe’s frantic search for an alternative to Russian energy carriers has sharply increased demand and prices for Norwegian oil and gas, AP reported.
As money pours in, Europe’s second-largest natural gas supplier is fighting accusations that it is profiting from the war in Ukraine, the news agency notes, recalling accusations by Polish Prime Minister Mateusz Morawiecki, who announced that the Norway benefited indirectly from the war.
Norway, one of the richest countries in Europe, spends 1.09% of its national income on overseas development – one of the highest percentages in the world, including more than $200 million in aid to Ukraine. With oil and gas coffers full, some would like to see more money allocated to alleviate the consequences of the war, rather than taken away from funding agencies that provide support to people in other countries.
Norway has drastically cut spending on most UN agencies and support for human rights projects to fund the cost of hosting Ukrainian refugees, said Berit Lindeman, policy director for the UN group. Human Rights of the Norwegian Helsinki Committee.
She helped organize Wednesday’s protest outside Oslo’s parliament building, criticizing the government’s priorities and saying the Polish remarks had some merit.
Oil and gas prices were already high amid the energy crisis, and because of the Russian-Ukrainian conflict, they have risen even further. Natural gas is sold three to four times more expensive than the same period last year. The international benchmark for Brent crude rose above $100 a barrel after the invasion three months ago and has rarely fallen below since then, the agency said.
State-controlled Norwegian energy giant Equinor earned four times more in the first quarter than in the same period last year.
This largesse has forced the government to revise its oil revenue forecast to NOK 933 billion ($97 billion) this year – more than three times what was earned in 2021. Much of the revenue will go to the huge fund sovereign of Norway – the largest in the world – to support the country when the oil runs out. The government has no plans to redirect these funds elsewhere.
European countries, meanwhile, have helped push up Norwegian energy prices in a bid to diversify supplies from Russia.
Europe is begging Norway, along with countries like Qatar and Algeria, to help tackle the deficit. Norway supplies between 20% and 25% of natural gas to Europe, while Russia supplied 40% before the war.
Despite this, Oslo has responded to European calls for more gas by issuing permits for operators to produce more gas this year. Thanks to tax incentives, companies are investing in new offshore projects, and a new gas pipeline to Poland will open this fall.
The situation is a far cry from June 2020, when prices crashed following the COVID-19 pandemic and the previous Norwegian government introduced tax breaks for oil companies to encourage investment and protect jobs. .
Combined with high energy prices, incentives expiring at the end of the year have prompted Norwegian companies to publish a series of plans to develop new oil and gas projects.
However, these projects will not start producing oil and gas until the end of this decade, or even in the more distant future, when the political situation may change and many European countries expect that the bulk of their consumption of energy will shift to renewable energy sources. .
Until then, Norway will likely face the more familiar criticism that it is contributing to climate change.