4.2. The formulation of Norwegian petroleum policies
Norwegian petroleum policy has historically been formulated in the interface between, on the one hand, national government interests and initiatives and, on the other, the interests of the commercial sector.[52] The present case study sheds light on the balance between these two sets of factors in formulating policies and the power that the different actors have in formulating this policy. Three observations can be made:
Firstly commercial interests, be they private or state, were “in command” when Norwegian oil policies de facto were changed following Hydro’s takeover of Saga. The initiative for the takeover came from the commercial sector. It was a commercial company, Hydro, that conceived of the idea and made a bid for Saga. It did not consult the government; neither did it did ask for permission from the government. Similarly Saga offered the company for sale based on a set of commercial considerations. Again all key decisions were made independently of government views (even if all commercial actors guessed what the reaction from the government would be to their actions).
Secondly, the Norwegian government took a generally reactive or passive attitude when confronted with this development. Once Hydro had made its bid it managed at a stroke to change the whole situation and the government had little choice but to follow. As one unnamed senior civil servant put it; “We have no choice in the long run but to follow the market.” The government did not at any time during the period under study initiate any change in the structure of the industry and in particular did not preoccupy itself with the exact number of Norwegian oil companies. It did not work actively for change. It simply sat and waited for others to act.
Thirdly, this way of behaving was different from how the government had behaved historically. The most obvious contrast is with how the government behaved during the start-up of the Norwegian petroleum era, especially in the early 1970s when the government both actively put in place the regulatory framework and also directly or indirectly helped to create two of the three Norwegian commercial companies that were to participate in the Norwegian oil industry.
However, based on this case study is it not possible to argue that there has been a permanent change in how petroleum policies are formulated and how power is thereby distributed in Norwegian society. There is no doubt that the instruments of government action are changing, not only in the petroleum industry, but in all industries. There has been a change towards more regulatory control and away from direct intervention. This is a global trend. The state may initially have been passive and reactive simply because it was surprised by what happened. Hydro’s move was a genuine surprise. But after a short time the government observed that development was in any case moving in the direction it wanted it to move. It was an aim of the Norwegian government to make the Norwegian shelf more efficient, and if this aim was achieved through rationalization of the industry and the disappearance of Saga... so be it. But the government was only willing to accept the disappearance of Saga if there was a “Norwegian solution”. This way of looking at the role of the government is broadly in line with a view that underlines that as the nature of the petroleum industry changes, so will the nature of government intervention. In the start-up phase of the Norwegian oil industry in the 1960s and 1970s the government (very successfully) laid down the broad regulatory framework and helped to create strong national oil companies. As the industry matured and the need to develop resources in a much more efficient and environmentally acceptable manner became paramount, the government increasingly accepted the need for market solutions. There was a realization that the government could not micromanage the activity and a willingness to let commercial actors themselves sort out important issues as long as the state maintained a negative strategic ownership role. [53]
But while the government may initially have been passive and reactive to what was happening in the Saga/Hydro case there is no doubt that towards the end of the process it showed clear ability to act. By proposing to the Storting in June 1999 that Hydro should make a private placement to partly pay for the takeover of Saga, and thereby decide the future of the company and its 1,200 employees, the government behaved as professionally as any equity manager.
[52] Lately international organizations like the EU have started to play a significant role, but this did not have much of an impact on the present case study.
[53] Svein S. Andersen gives a good description of such a position in Andersen Svein S. 2001. ”Markedstilpasning av norsk petroleumsvirksomhet”. In: Den fragmenterte staten. Reformer, makt og endring. Bent Sofus Tranøy and Øyvind Østerud, eds. Oslo: Gyldendal Akademisk.