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"Leinster House, calling Leinster House, can you hear? This is Mayo calling!"

Michael Cunningham's article published in Mayo Association Yearbook 2002
Norway has around four million of a population. They, like Ireland, only got their independence at the beginning of the twentieth century. This is their story! An indicator on how our hydrocarbon resources off our County of Mayo coast should be exploited to benefit all the people of this little country over whom you rule! Norway also is a small country, but fully realises the potential riches off its western shores.
After more than a quarter of a century working in the international oil and gas industry I still hold fast the belief, that energy in all forms, is the driving force in our civilization, with an emphasis on oil, and more increasingly on gas, well into this century. Oil is called black gold and is synonymous with power. The multinational oil and gas industry has deftly used all these advantages to keep itself and the world up-to-date with hydrocarbon reserves and supply from ever more complex regions, both geologically and technically. Norwegian government resists been taken in by spurious promises!
In 1958, Western Europe's biggest gas field was found many thousands of metres below the Dutch cornfields in the province of Groningen. Geological and geophysical specialists had long said that that the same rock formations stretched out into the North Sea. Just three years after the Groningen find, in the autumn of 1961, the first oil explorers knocked on Norway's door: they were two representatives from the American oil company Phillips Petroleum based in Bartlesville, Oklahoma. Despite persistent representations to gain the sole rights to explore for oil and gas on the entire Norwegian continental shelf they were refused. There was no framework of rules and procedures in place.
The Norwegians had primarily been alerted to the possible potential hydrocarbon of their offshore waters and acted accordingly. With the Royal Decree of 31st May 1963, Norway proclaimed sovereignty over the seabed and its subsurface for the purposes of exploration and exploitation of its natural resources.
Big oil companies made wait!
The next step was to formulate rules and regulations, without which, the Government insisted that offshore hydrocarbon activity could not begin. On 9th April 1965, rules and regulations, governing the exploration and recovery of hydrocarbons were introduced. The oil and gas industry, including the World's Seven Sisters was made to wait until Norway's Government was fully satisfied that the countries best interests were protected and served. Norwegian Government encourages involvement of local communities!From here on in, events moved rapidly: on the 17th August 1965 the Government awarded production licences for 78 offshore blocks to nine multinational oil and gas companies. At the same time the small western seaboard town of Stavanger, highly dependent on fishing, was earmarked for ongoing parallel onshore development as an oil and gas service base. Central Government and the local communities in Stavanger worked hand in hand, in preparing for a new day, as the homeport for hydrocarbon exploration and development.The countries first industry supply base was established in Stavanger within twelve months.
Norway never threw in the towel!Of course this pro-active stance in respect to the development of their offshore hydrocarbon resources was tempered with disappointment along the way, particularly in respect to the nautical and technological challenges in the harsh North Sea environment. Between 1966 and 1969 thirty-one dry holes at a cost of NOK 850 million were drilled, without any significant find. The industry was becoming despondent and on the verge of packing up. On the day before Christmas Eve 1969 the miracle happened, Phillips Petroleum's drilling rig the 'Ocean Viking' struck a massive oil and gas field some 220kms from the town of Stavanger.
Norway's speculation pays off!
Norway had become an oil and gas-producing nation, a member of the world's most exclusive elite. When production commenced in 1971 the Ekofisk field proved to be amongst the largest oil and gas field in the world. With the passage of time further enormous Norwegian oil and gas fields such as Statfjord, Frigg, Gullfaks, Oseberg and Snorre have been brought into production. Private V Public control.It came as no surprise to the world's oil and gas multinationals, who advocate private capitalism, that the Norwegian state wanted to have full national control of hydrocarbon activity. This had been on the cards from the outset, but as well as fears relating to indigenous hydrocarbon industry related growth Norway was reticent with risk capital. To circumvent this, the Government, in 1973 established the Norwegian Petroleum Directorate and Statoil, the Norwegian State Oil Company. Both entities were also charged with procuring the necessary professional competence to serve the Countries interest in the embryonic offshore hydrocarbon industry. Norway's successful recipe: hydrocarbon resources coupled with far seeing central government leadership With Statoil, the country became involved with 50% and above, a condition which the multinationals accepted. Through its high participation, Statoil was able to sit in on all-important decisions and gradually take control over all relevant multinational offshore operatorships on the Norwegian continental shelf. Thus in every way, ensuring its rapid growth into a fully integrated oil and gas multinational, whilst at the same time protecting and maximising the State's interests.
Norwegian people reap the rewards
The Norwegian Government Petroleum Fund was established in June 1990, to safeguard long-term economic and socio-economic benefits arising from hydrocarbon revenues and is invested in equities and interest bearing assets across 21 countries in Europe, North America and Asia/Oceania. The fund's combined market value securities portfolio currently stands at in excess of NOK 522.8 billion. Little Norway protects her environment!Throughout and despite dire warnings from the multinationals that 'It will never work,' Norway has consistently enforced changes to their hydrocarbons fiscal terms to benefit the State. Public environmental concerns continued to be strenuously addressed on an ongoing basis and in all instances stringent practices were and continue to be enforced on the multinationals to protect the environment.

Gas for every household!

Today the Groningen field is still in production, a dense network of onshore gas transmission lines reaches every corner of the Netherlands, providing natural gas to industry and every household in the country. Little Norway has shown the way, and reaps the benefits!Norway has become the world's second largest exporter of crude oil. The situation for gas is little different, it has three per cent of the world's gas reserves and by 2005 will be one of the five largest producers of gas in the world. In 2020, gas will outstrip oil as the major money-maker in the Norwegian oil and gas industry. The small town of Stavanger has become the premier oil and gas capital of Western Europe.
Leinster House! Do you read me?
As we embark on the first phase of critical offshore hydrocarbon gas development off our coastline, with Mayo's Corrib gas field; there surely are lessons to be gleaned from Norway's management of their oil and gas reserves. Their harnessing of Norwegian local coastal communities should be mirrored in the involvement of local Mayo people and its displaced worldwide Diaspora in the exploitation of our hydrocarbon resources and not leave them dispirited and disenfranchised. Similarly, the British Government set up the Offshore Supplies Office(OSO). This body insured that they got the full benefit from the servicing of the Oil and Gas industry in the North Sea. It harnessed the involvement of its own living communities (remember those human like creatures living in villages, dotted along coastal counties/shires who live in houses, pay rates and taxes and generally form the backbone of a country!). The communities could then in a tangible way contribute to national wellbeing and benefit from the oil/gas bonanza on their doorstep and not depend on government handouts!!!!!!!!!!!

Posted Date: 
10 April 2005 - 1:14pm