Introducing Norwegian Oil and Gas Model in Russia: Institutional Challenges

Abstract

While the Norwegian oil and gas model is a popular reference case in Russia, one should realize that it has developed over time within a specific national, historical and institutional context. The core role in this model belongs to the Norwegian state in terms of resource management, establishing the regulatory framework, massive taxation, and actual involvement in the business, first of all through the national petroleum company Statoil/Equinor. Equinor has evolved since 1972 from a modest carried partner to a large streamlined corporation, operating in 35 countries and focusing heavily on global technological leadership. All investors, either state-owned or private, are put under the same public scrutiny and stimulated with non-fiscal incentives, such as political stability, predictable regulations and abundant geological information. This large scale government intervention relies on proactive, professional and incorrupt bureaucracy enjoying broad powers. Much of this practice is not common and may not be introduced directly in Russia, which tends to limit the role of public servants and rely on big state corporations. However, the Norwegian experience seems very relevant for the urgently needed overhaul of the Russian energy policies, both offshore and in Western Siberia