Norway keen to offer oilfield help to Arab states

Norway hopes it will be able to help Iraq and Sudan resolve their problems and, through resource wealth management, enter a new age of prosperity.

OSLO // Norway's relations with Arab states are shaped more by energy interests than bilateral trade.

The Nordic country's decades of experience with managing resource wealth gives it common ground with other major oil producers, including those from the Middle East, says Espen Barth Eide, the Norwegian deputy minister of foreign affairs.

"Norway is not in OPEC, but we are close friends," Mr Eide says. "We sometimes end up taking positions quite similar to OPEC. The existence of OPEC has been historically good for us."

As a country with a large land mass, small population and enough hydropower to supply more than 96 per cent of its electricity requirements, Norway's domestic market consumes little of the oil and gas pumped from its North Sea sector and Arctic waters. Consequently, it is by far the largest western European oil and gas exporter, and among the most significant in the world.

The issues Norway overcame to provide a high standard of living for citizens who previously struggled with its harsh climate resemble those still challenging most Arab oil exporters. Norway is ready to offer assistance, and Mr Eide hopes his country will be able to help Iraq and Sudan resolve their problems and enter a new age of prosperity.

"We have some elements of expertise on the technical side. But what we also have, which may be a bit more unique, is a sound management system for oil revenues," he says. "We did not do everything perfectly, but that package, I dare to say, is one thing we did right. It has been proven by our economic success.

"One of the things we're doing with certain countries, and we'd like to do more of with Iraq, is to help them on the political side."

Norway is already working with Sudan's political leaders to help them cope with the impact of the recent referendum on southern Sudanese secession. The results of the week-long vote are still being tallied, so it is not yet known whether Sudan will remain unified or will split into two separate states.

Oslo hopes to convince political leaders in Khartoum and Juba, the southern region's capital, that continuing to pump oil in southern Sudan and exporting it through a Red Sea port in the north of the country could be a practical guarantor of peace. Whether the country remains unified or not, both parts of the oil production and export system must remain in operation for either region to generate foreign revenue.

"We're trying to convince the parties that oil can be a recipe for peace," Mr Eide said. "You have a mutual destruct capacity, but you can only succeed together."

From the vantage point of his foreign ministry office, just a few minutes' walk from Oslo's Nobel Peace Centre, he concedes that Norway has a commercial interest in the outcome of Middle East and African peace initiatives.

Statoil, the country's biggest oil producer, is working with Lukoil of Russia to boost output from Iraq's giant West Qurna 2 oilfield. DNO International, a small Norwegian oil producer in which the UAE's RAK Petroleum holds a 30 per cent stake, was the first company to pump oil in Iraqi Kurdistan. Although Norway does not as yet have any oil and gas production or services contracts in Sudan, Norwegian firms are active in west Africa's energy sector.

That is why Oslo backs up its diplomatic efforts in the region with technical assistance.

"In Sudan, we are advising on the quality and size of the [oil] reserves and how to divide the income," Mr Eide says.