Serious question, why is Norway so rich with so low oil compared to the rest (not necesarilly Venezuela or Iran as I know the regimes are awful there, but Canada? )
by Sugar_Vivid
Serious question, why is Norway so rich with so low oil compared to the rest (not necesarilly Venezuela or Iran as I know the regimes are awful there, but Canada? )
by Sugar_Vivid
35 comments
Because Norway puts most of the profits into our sovereign wealth fund, also compared to many other oil rich nations we have relatively little corruption and political stabilityÂ
Because the state has control of it and its funds.
In other countries private companies got the rights to drill and keep the profits
It’s the sovereign wealth fund which makes it richer than other countries. They’ve managed and invested the oil money very well.
Because Norway’s oil wealth is mostly put into a fund, not spent. Norway’s “active” wealth comes from what is left of wealth distribution policies. Also tiny population.
Low population, we’ve, mostly, avoided Dutch disease, we’re a stable country, and we’ve been planning for the future since the 90s.
Because we have sensible and forward looking government that invest the money into a wealth fund
The state almost immediately introduced a high tax rate on oil extraction after its discovery. Since the 1990s, gas production has increased significantly, but the profits have been placed into a fund that is regularly replenished and well managed. No single company or individual has ever controlled the majority of the revenue. As a result, on paper, the Norwegian state is extremely wealthy.
Because the Norwegian government started a soverign wealth fund pretty much right after they discovered the oil. This fund is actively managed by “Norges Bank”.
Here is a live tracker of the oil fund: [Oljefondet | Norges Bank Investment Management](https://www.nbim.no/no)
Its about 2.1 trillion USD, which in turn “makes” it so each Norwegian has 380K USD.
To clarify this is not money each and every citizen gets, its just a “saying” so to speak.
Norway never sold it’s oil reserves. Companies are given consessions, which secures a good return for the state – which is then largely invested in the oil fund. At present the yield from the oil fund exceeds the oil & gass income by 2-300%. So yeah, right now we’re just a hedge-fund…
The regimes are awful??? or the regimes refuse to be the puppet of America and because of that they’re sanctioned for decades now.
You need to read a little before embarrassing yourself in public.
And some people think Norway can single handedly save the climate by terminating our oil and gas activities…
Because we have treated our oil as a collective resource, so private companies have not been allowed to secure all of the profits for themselves. (Extra high taxes), as well as having a publicly owned oil company.
Because we tax every operator 72%. And we put it into a wealthfund and very marginally invest it and barly beats the index.
Tax is the key… the tax makes us so rich from oil
It’s because of a very tiny population, with only 0.06% of the world population that oil reserve is a lot.
A secondary point, perhaps, but alot of Canada’s oil isn’t as accessible like North sea oil. Its costly and not as profitable to extract petroleum from oil sands of which Canada has plenty.
The role of Farouk Al Kasim should not be underplayed. This Iraqi geologist came at the exact right moment and with first hand knowledge about how the oil companies operate, he was vital in laying the legal foundation for hindering the oil companies in literally screwing Norwegians completely over.
[Farouk Al Kasim](https://FaroukAlKasimhttps://share.google/HwCf4lXoN5C0s3l2t)
Saudi princes turn 747 into private jets, we tax the extractors to redistribute the wealth. Simple as that.
Because they are commies
Norway has the belief that the resources should belong to the people of the nation instead of billionaires multi nationals. Well done Norway.
me: Looking at how Austalia gets stitched up by Chevron, Santos, Exxon and Woodside. It hurts to see such poor mismanagement and corruption. …and the general apathy of Australians.
The main reason is that Norway was already a rich and developed country before the oil got extraxted. The tax on oil is very high, but the sovereign wealth fund doesnt actually make Norway as a country rich since its never used as spending money in the economy. Only a percentage of tax of oil from every year actually goes into the state budget. I believe the percentage is at 4%.
Because it didn’t let private / foreign companies rob its off its wealth, and it saved the wealth instead of spending it on consumption right away (like Iran did, for example).
Polygamy.
The Arab states have many princes who need luxury cars jets etc. it’s expensive when you have many wives pumping out children.
Jokes aside, cultural attitudes do result in differences on spending, investment etc
One thing is reserves, but Norway has produced approx 100 billion barrels of oil equivalents since the start. A lot of those profits has been transferred and managed in our sovereign wealth fund.
Because oil production and oil reserves are not the same thing
Canada has a lot of oil but it’s extremely expensive to extract. I don’t remember why but something like it’s really deep underground. Therefore extracting it would not be profitable at nowadays market prices.
Saudi Arabia, on the other hand, has the “cheapest” oil, meaning it’s easy to extract and therefore they make hefty profits out of it.
When this started we were 3-4 million people in Norway. So we have quite a lot per capita.
Then the state have direct ownership in (all) licenses, typically 20-30%.
And there is a special profit tax, you get cash refund for investments, but pay a high tax for profits. So total tax for oil profit is 78%. Very much goes to the state, but it’s still extremely profitable for the oil companies.
And finally, all income from oil profit goes into a fund. Tax income may not be used by the government, only the dividends from the fund. This prevents varying governments from doing stupid shit just because we are so rich.
Most answers here are missing the mark. The answer is not mainly policy driven (i.e. sovereign wealth fund albeit that it contributes with significant returns), but that the chart shows 2P reserves and not cumulative historical production per capita. The Norwegian petroleum industry is mature and we have extracted most of the value already and with a small population, that provide significant value per capita.
Norway is just the world’s biggest hedge fund with the oil companies being held as unwilling clients. Big oil is taxed as much as 75% on profits and the money the state gets is treated exactly as any hedge fund would.
I just wanted to add a small detail, the chart shows the oil that is left, not the oil that has been sold.
Taxes, taxes taxes. Also, Candas oil reserves are generally more expensive to extract when compared to the reserves of Norway (or iran and Venezuela for that matter). The existing infrastructure on the norwegian seabed is capable of distributing oil from new reservoires with limited investment, making it possible to add smaller reservoires to the system while keeping the operation profitable, even in a high tax environment
Thats because we are a socialist democracy, and not a dictatorship like Russia or a capitalist hellhole like the US
We save the profit.Â
We are not rich compared to other countries. We have a small population, so the government is rich per capita.
probably a bit of a controversial opinion but it is because we are rich not due to oil, if we lost all oil we would not collapse, sure we would have a huge shock to our system and the social welfare programs would need to be restricted and put on some austerity but apart from that you would not see millions of Norwegians on the metaphorical streets,
sure poverty would rise among the poorer which would not be good but there are systems set in place that allow charity organisations like food banks to take food from stores that is just about to expire and distribute it toward those that are poorer (I have been in that situation as a child, it was just regular food, the only unusual thing about it was that we needed to drink the milk quickly or make it into cheese if you could do that),
the local government (Norwegian equivalent to state government) would quickly implement a new policy that would make it so that schools would have free food for their students, sure 1 or 2 assholes would complain but it is nothing that the society would be in deadlock over
the military would still be funded since they act as disaster prevention/recovery in the events of severe natural acts like flooding or extreme snow not to speak about russia
the only thing that the fund does for the average is to act as an economic bumper, the reality is that even without the fund the people would still survive the day to day operations, of course 08 financial collapse would be hitting Norway and the wallets of the Norwegians a lot harder but that is kind of what it is designed for
now the question I would ask would Norway manage so well if we metaphorically spawned in in 2026? I would say no, remember that one of the bigger export that Norway did have in the past was the export of ice, every winter the Norwegians would gather onto the ice and start to cut up the ice and then hoist it onto a piece of metal or wood and then do the same again with another piece of ice and throw it on top of the ice that they just putted up, they would do this and when it started to become warmer they would send the ice in heat insulated vans to the world for the under ground freezers (no I am not joking, [they even sent one cube from Mo i Rana in Norway to Libreville in Gabon](https://en.wikipedia.org/wiki/Ice_block_expedition_of_1959)), the invention of ways to cool water to 0 celsius would mean that the ice selling business would be untenable which would require us to sell wood or metals
A lot of people rightly points out that Norway has had a smart system that ensures most ofte profits stay in the country, and that much of it (not all!) is saved rather than spent. Plus a small population and low corruption.
But the other part of it is simply that Norway never had reserves as large as those other countries, most of the found oil is already out of the ground.
Oil production peaked in 2001, oil/gas combined in 2004. Gas has not peaked, but has much more variable profitability, although high since Russia started that war.
The other large oil exporters just have much more left over.
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