Statoil

The former Norwegian petroleum company, Den Norske Stats Oljeselskap AS, was founded on July 14, 1972, and operated as a private limited company wholly owned by the government of Norway after a unanimous act of parliament passed by the Norwegian Stortinget. It came about after the discovery of large deposits of offshore oil and the Norwegian government was keen to take part in exploitation of oil on its continental shelf. Its initial managing director was Arve Johnsen.

The theory of oilfields in the North Sea led to problems about how these might be exploited, but these were largely academic until December 1969 when Phillips Petroleum, an American independent company, was able to map out the Ekofisk field in the Norwegian sector of the North Sea. Phillips negotiated a flat 10 percent royalty fee from the government, plus taxes. Initially, the Norwegian government was not sure how to exploit this, but it founded Den Norske Stats Oljeselskap AS—known as Statoil—to do this, using the expertise of other oil companies that would be hired on a contractual basis. This kept the control—and also the profits—with the Norwegian government, a move that became more important with the discovery of other oilfields such as the Statfjord one, which was then estimated to have 2 billion barrels, soon after the mapping of the Ekofisk oilfield.

The other economic imperative driving the decisions by the Norwegian government was that the oilmen should be Norwegian. To proceed, they moved far slower than their British counterparts who sought to exploit their oilfields in the North Sea as quickly as they could. The British were keen for the oil to save them from having to import increasingly costly oil—the price having quadrupled—and were in a precarious financial position. The Norwegians, by contrast, with a much smaller population, recognized that they would become self-sufficient in oil by 1975. They were helped by the fact that, at that time, 55 percent of all power in the country came from hydroelectricity. Initially, most of the oilmen operating in Norway were foreign, but the Norwegian government introduced a program of systematic training, and by 1974, four out of five of the oilmen working in Norway or in Norwegian waters were Norwegian.

In August 1975, to ensure greater Norwegian control over the oil, the Norwegian government took over Norsk Braendesloje, a subsidiary of British Petroleum (BP) that was 50 percent owned by BR This was then handed to Statoil to improve its control of the sector. Thus, by late 1975, Statoil controlled 75 percent of production from Ekofisk, and to help with the exploitation of Statfjord, became equal partners with Mobil. Statoil was also invested with control of 37 blocks of seabed on Norway's continental shelf, each of which covered some 200 sq. mi. However, the strategic plan for the Norwegians was for Statoil to exploit an oilfield on its own. This became closer to [Page 1498]reality when the Norwegian government, in October 1980, announced that an oilfield west of Bergen, with about 1 billion barrels of oil, was to be exploited by Statoil, which would have an 85 percent stake, Norsk Hydro a 9 percent stake, and Saga Petroleum a 6 percent stake.

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