Managing resource abundance and wealth. The Norwegian experience

344 Pages·2017·1.62 MB·English

by  Letnes

Managing Resource Abundance and Wealth

Managing Resource
Abundance and Wealth
The Norwegian Experience
Jonathon W. Moses and Bjørn Letnes
1
3
GreatClarendonStreet,Oxford,OX26DP,
UnitedKingdom
OxfordUniversityPressisadepartmentoftheUniversityofOxford.
ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship,
andeducationbypublishingworldwide.Oxfordisaregisteredtrademarkof
OxfordUniversityPressintheUKandincertainothercountries
©JonathonW.MosesandBjørnLetnes2017
Themoralrightsoftheauthorshavebeenasserted
FirstEditionpublishedin2017
Impression:1
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedin
aretrievalsystem,ortransmitted,inanyformorbyanymeans,withoutthe
priorpermissioninwritingofOxfordUniversityPress,orasexpresslypermitted
bylaw,bylicenceorundertermsagreedwiththeappropriatereprographics
rightsorganization.Enquiriesconcerningreproductionoutsidethescopeofthe
aboveshouldbesenttotheRightsDepartment,OxfordUniversityPress,atthe
addressabove
Youmustnotcirculatethisworkinanyotherform
andyoumustimposethissameconditiononanyacquirer
PublishedintheUnitedStatesofAmericabyOxfordUniversityPress
198MadisonAvenue,NewYork,NY10016,UnitedStatesofAmerica
BritishLibraryCataloguinginPublicationData
Dataavailable
LibraryofCongressControlNumber:2016958735
ISBN 978–0–19–878717–4
Printedandboundby
CPIGroup(UK)Ltd,Croydon,CR04YY
LinkstothirdpartywebsitesareprovidedbyOxfordingoodfaithand
forinformationonly.Oxforddisclaimsanyresponsibilityforthematerials
containedinanythirdpartywebsitereferencedinthiswork.
Toourchildren

Acknowledgments
We are fortunate to work at one of Europe’s premiere technical universities
(the Norwegian University of Science and Technology, or NTNU), where
petroleumengineersaretrainedtoaddresstheenormoustechnicalchallenges
associatedwithbringingNorway’soffshoreoilandgastomarket.Severalyears
ago,webeganacollaborationwithNTNU’sInstituteforPetroleumTechnol-
ogy to teach engineering students about the social, political, economic, and
ethicalchallengesofpetroleummanagement.Wejumpedattheopportunity
todevelopanewcourse,andthetextbeforeyouisjustonetangibleresultof
ourefforts.
Over the years, we have become indebted to our students—both graduate
and undergraduate,engineersand socialscientists. Weare proudtosee how
the course has functioned as a bridge between the social science and engin-
eeringfields,allowingstudentsandstaffaliketopassbackandforthonfruitful
journeys of discovery and growth. Among those exchanges are our annual
sojourns to the Department of Chemical and Mining Engineering at the
University of Dar es Salaam in Tanzania, where we have enjoyed getting to
know our African students in a more intensive (and hence necessarily more
intimate)setting.Wearegratefultoallthesestudents,inbothTrondheimand
Dar es Salaam, for their very useful input over the years. We have learned a
greatdealfromtheexchange.
We are also grateful to the responsible academics in these programs, who
haveopeneduptheirprogramstous,andforgivenourtrespasses.Morethan
that,ourengineeringcolleagueshavemadeusfeelverywelcomeindeed.We
wouldhavenevercontinued withthiseffort haditnotbeenforthesupport
andencouragementofAmbroseItika,JonKleppe,andEgilTjåland.Wewish
tothankthesecolleaguesforhelpingusbuildandmaintainthisbridge.
As we learned more about the industry, we became indebted to several
friendly informants along the way: in the field, within the industry, and
among consulting colleagues. We have learned much from those who will-
inglysharedtheirknowledgewithus,albeitofteninformally.Inparticular,we
wouldliketoexpressourthankstoFaroukAl-Kasim,BengtHope,ErikJarlsby,
Per Kulseth, Marilda Rosado, and Richard Wilfred Rwechungura. The good
offices and support of Statoil, Petrad, and the Association of International
Acknowledgments
Petroleum Negotiators (AIPN) are also appreciated, in providing us access to
experts,information,andpotentialcolleagues.
Asforthetextitself,wethankDavidĐukanovi(cid:1)cforhisresearchassistance
early on in the project, along with Natalia De Lima Figueiredo and the
anonymous reviewers at Oxford for their useful comments on earlier drafts.
MichaelAlvarezand Omano Edighejihave beenfrequentsources of support
overtheyears,anddiligentreadersofearlierdrafts.Forthatwearebothvery
thankful.Onamorepersonalnote,JonathonwouldliketothankOmanofor
originallysparkinghisinterestinthesubjectmatter.
Of course, should any errors remain—despite the generous assistance and
support from the aforementioned—the responsibility and blame is entirely
ourown.
viii
Table of Contents
ListofFigures xi
ListofTables xiii
ListofBoxes xv
ListofAbbreviations xvii
1. Introduction 1
2. TheInternationalContext 17
3. TheNorwegianContext 38
4. TheNorwegianPetroleumAdministration 58
5. CommercialFrameworks 86
6. MacroeconomicBalance 107
7. WealthManagement 125
8. SecuringLocalContent 138
9. RegulatingtheWorkplaceandtheEnvironment 167
10. TheEthicsofPetroleum 196
11. Conclusion 229
Glossary 241
Notes 251
References 273
Index 299