Norway Proves Only Western Nation to Stand as OPEC Ally

By Robert Burns, | THE JOURNAL RECORD, January 13, 1987 | Go to article overview

Norway Proves Only Western Nation to Stand as OPEC Ally


Robert Burns,, THE JOURNAL RECORD


OSLO, Norway - For the first 15 of its 16 years as an oil producer, Norway stood in the shadow of its North Sea neighbor, Britain, content to follow the free-market ways of a friendly oil power.

Then came the collapse of oil prices last spring and a decision by a new Norwegian government to break ranks with Britain and other Western countries and assist the Organization of Petroleum Exporting Countries in pushing prices back up.

This rush to the forefront of global oil politics reflects Norway's divided loyalties.

While it sees a possible payoff in the future from cooperating with the OPEC cartel, Norway is a member of the North Atlantic Treaty Organization and the oil consumers' club, the International Energy Agency - both of which have viewed OPEC as a threat.

This month, as it approaches a decision on whether to strengthen its ties to OPEC, Norway stands, at least symbolically, as the cartel's most coveted ally. It is the only Western industrialized nation to side openly with OPEC.

For the last four months of 1986, Norway withheld from the market about 10 percent of its normal oil exports by putting oil into government-owned emergency stocks. Although small, the cutback was of major political significance to OPEC and the world oil market.

Now Norway is considering the even bolder move of forcing British, American, Norwegian and other oil companies that operate its North Sea fields to either cut production or reduce planned increases. The government says a final decision is likely by mid-January, and indications are that it will go ahead with some production cuts.

By intervening in its oil industry to help OPEC tighten supplies and raise prices, Norway has crossed a political line that seemed impenetrable in the 1970s, when the Western economies were reeling from the effects of rapid OPEC price increases.

``We are, in a way, making their (OPEC's) policies legitimate in the eyes of the Western world,'' the Norwegian oil minister, Arne Oeien, said in a recent interview with The Associated Press in his Oslo office.

Norway, whose first significant oil field began pumping in 1971, currently produces about 1 million barrels of oil a day, putting it in the middle ranks of world producers and ahead of some OPEC members.

Norway's output is scheduled to peak at about 1.3 million barrels a day in 1991, and it expects to continue exporting well into the 21st century.

Oeien stoutly defends his government's decision to side with OPEC but stresses that Norway has no intention of becoming an OPEC member.

``The present depressed oil price is a threat to future oil supplies to the Western world,'' he said. ``We think a higher price would be better for the West over the long run. …

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