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Norwegian government open to continued oil exploration

Norway's Oil and Energy Minister Terje Aasland says that, in the long term, in light of the current energy and security situation in Europe, there are increased opportunities related to oil exploration in the Barents Sea.

Published: 27 November 2022 16:06 CET

Oil transport

Norway has become the largest exporter of gas to Europe after Russia cut off its gas supply. Photo by Emmaus Studio / Unsplash

The Norwegian government has an agreement with the Socialist Left Party (SV) that the 26th licensing round for oil exploration will not be launched this year.

Still, Minister Aasland told the newspaper Dagens Næringsliv (DN) that he is open to issuing a call for new blocks next year.

“The Norwegian continental shelf is much more attractive now. The Norwegian continental shelf plays a much larger, more important role for European energy security (now) than ever before,” Aasland noted.

The war in Ukraine

Norway became the largest gas exporter to Europe after Russia cut off its gas supply.

“I believe that the opportunity in the Barents Sea in a long-term perspective has been strengthened through the situation that we are experiencing.

“The need for gas has not diminished with the situation that has unfolded with the war in Ukraine…

“I feel that the European Union (EU) wants Norway to develop its oil and gas activities further, (so that it can) be a stable and long-term supplier of gas,” Aasland added.

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Workers in Norway to enjoy highest real wage increase for a decade

Statistics Norway said in a report released Friday that Norway’s economy is set to pick up in the coming years and that workers will benefit as a result.

“Now the arrows are pointing upwards in many areas. Activity in the Norwegian economy will probably pick up, as a result of increased real wage growth, high activity in public administration, as well as a turnaround in housing investment,” Thomas von Brasch at Statistics Norway said in the report.

The report was a forecast on the country’s economy up until 2027. The data agency said that workers in Norway would benefit from a real wage increase of 1.9 percent this year.

Forecasted real wage growth for this year would be the highest in more than ten years, as real pay in Norway has been largely stagnant since 2015. There was also more good news for consumers, as real wages are expected to grow by around 1.5 percent per year until 2027.

Further good news for those hoping for more disposal income in the future could come in the form of interest rate cuts early next year. Statistics Norway expects the central bank to cut the key policy rate in March 2025.

The reason rates likely won’t be cut before then is due to the weak Norwegian krone.

“Norges Bank will probably try to avoid the krone weakening further. The central bank will probably wait with the interest rate cuts until after other central banks have cut their interest rates a good deal. The recent weakening of the krone means that the key interest rate will only be cut from the beginning of next year,” Brasch said.

However, the report wasn’t all good news. Inflation in Norway was likely to remain above the central bank’s target of 2 percent for this year, at least.

There was also bad news for those looking to get on the property ladder as house prices were expected to rise in the coming years. Although, high interest rates would dampen prices somewhat.

READ ALSO: What first-time buyers in Norway need to know about the current property market

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