Unexpected oil revenue boost fuels unease in Norway

One man's loss may, at times, be another's unfortunate gain, and the Ukraine conflict is proving a boon to Norway, western Europe's largest exporter of oil and gas.

Oil rig in Norwegian waters.
Increased oil revenues due to the war in Ukraine have left Norway with a moral dilemma. Pictured is an oil rig in Norwegian waters. Photo by Jan-Rune Smenes Reite from Pexels

The war has given an unexpected boost to Norway’s oil revenues and now the country, concerned it will be seen as a “war profiteer”, is mulling what to do with its sudden windfall.

Fuelled by the sanctions imposed on Russia after its invasion of Ukraine, the surge in oil and above all gas prices could see Norway racking up almost 1.5 trillion kroner ($170 billion, 150 billion euros) in extra oil and gas revenue this year, according to Nordea bank.

Western Europe’s biggest oil and gas exporter and already one of the richest countries in the world, Norway could pocket nearly 50,000 kroner ($5,680, 5,125 euros) more than expected every second of the day without even lifting a finger.

But the boon is giving it a guilty conscience.

“There are times when it’s not fun to make money, and this is one of them, given the situation”, admitted Petroleum and Energy Minister Terje Aasland in an interview with television channel TV2.

Most of Norway’s oil revenue ends up in the state’s coffers — through taxes, dividends and direct holdings in oil and gas fields — which it then
places in its sovereign wealth fund, already the world’s biggest.

READ MORE: Why is Norway such a wealthy nation?

The fund has suffered from the global stock market falls in recent weeks, but is still worth around 11.5 trillion kroner, or more than 2 million kroner ($227,000, 200,000 euros) for each of Norway’s 5.4 million inhabitants.

“Norway cannot escape the unpleasant fact: this is a form of war profit”, daily paper Dagbladet wrote in an editorial.

“While Ukraine is being destroyed, and most other countries are mainly feeling the negative effects of the war, such as higher energy prices, higher food prices and general inflation, we are making a gain”, it said.

“This must be reflected in the way we think about the use of money.”

Multi-use Marshall Plan?
Many want to see a redistribution of all or part of the war gains. Norway’s Green Party has called for the billions of additional petrodollars
to be placed in a “solidarity fund” to be used as a sort of Marshall Plan for various needs.

It could be used to finance both humanitarian aid and the reconstruction of Ukraine, help Europe reduce its dependence on Russian gas and help the poorest countries counter soaring costs for energy and food, the party suggested.

“The extra oil revenue from the war should go to Ukraine, not us”, it said.

The centre-left government has so far pledged “up to” 2 billion kroner ($227 million, 200 million euros) in humanitarian aid to Ukraine.

‘Display leadership’

Prime Minister Jonas Gahr Store has insisted that Norway can help most by supplying as much gas as possible to Europe to help reduce its dependency on Russia.

Norway covers between 20 and 25 percent of the European Union’s and Britain’s needs via a vast network of gas pipelines, compared to between 45 and 50 percent for Russia.

European Climate Pact ambassador Paal Frisvold meanwhile suggested that Norway should forgo the “superprofits” and cap the price of gas sold to European countries which are just emerging from the pandemic, some with heavy debts.

“Our profits are the invoices of others”, he told AFP.

“The most important thing is to show solidarity, to display leadership at a historic moment. My kids are going to ask me: Dad, what did Norway do during the Ukraine war? I don’t want to tell them that we made a killing”, he said.

Norway’s government, which is currently drawing up its spring budget bill, said there was currently no plan for such a cap.

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Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Ukraine won the Eurovision Song Contest Sunday with an infectious hip-hop folk melody, boosting spirits in the embattled nation fighting off a Russian invasion that has killed thousands and displaced millions of people.

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Riding a huge wave of public support, Kalush Orchestra beat 24 competitors in the finale of the world’s biggest live music event with “Stefania”, a rap lullaby combining Ukrainian folk and modern hip-hop rhythms.

“Please help Ukraine and Mariupol! Help Azovstal right now,” implored frontman Oleh Psiuk in English from the stage after their performance was met by a cheering audience.

In the Ukrainian capital Kyiv, the triumph was met with smiles and visible relief.

“It’s a small ray of happiness. It’s very important now for us,” said Iryna Vorobey, a 35-year-old businesswoman, adding that the support from Europe was “incredible”.

Following the win, Psiuk — whose bubblegum-pink bucket hat has made him instantly recognisable — thanked everyone who voted for his country in the contest, which is watched by millions of viewers.

“The victory is very important for Ukraine, especially this year. Thank you from the bottom of our hearts. Glory to Ukraine,” Psiuk told journalists.

Music conquers Europe

The win provided a much-needed morale boost for the embattled nation in its third month of battling much-larger Russian forces.

Mahmood & BLANCO  performing for Italy at Eurovision 2022

Mahmood & BLANCO perform on behalf of Italy during the final of the Eurovision Song contest 2022 in Turin, Italy. (Photo by Marco BERTORELLO / AFP)

“Our courage impresses the world, our music conquers Europe!” he wrote on Facebook.

“This win is so very good for our mood,” Andriy Nemkovych, a 28 year-old project manager, told AFP in Kyiv.

The victory drew praise in unlikely corners, as the deputy chief of the NATO military alliance said it showed just how much public support ex-Soviet Ukraine has in fighting off Moscow.

“I would like to congratulate Ukraine for winning the Eurovision contest,” Mircea Geoana said as he arrived in Berlin for talks that will tackle the alliance’s expansion in the wake of the Kremlin’s war.

“And this is not something I’m making in a light way because we have seen yesterday the immense public support all over Europe and Australia for the bravery of” Ukraine, Geoana said.

British Prime Minister Boris Johnson called the win “a clear reflection of not just your talent, but of the unwavering support for your fight for freedom”.

And European Council President Charles Michel said he hoped next year’s contest “can be hosted in Kyiv in a free and united Ukraine”.

‘Ready to fight’
Despite the joyous theatrics that are a hallmark of the song contest, the war in Ukraine hung heavily over the festivities this year.
The European Broadcasting Union, which organises the event, banned Russia on February 25, the day after Moscow invaded its neighbour.
“Stefania”, written by Psiuk as a tribute to his mother before the war, mixes traditional Ukrainian folk music played on flute-like instruments with an invigorating hip-hop beat. The band donned richly embroidered ethnic garb
to perform their act.
Nostalgic lyrics such as “I’ll always find my way home even if all the roads are destroyed” resonated all the more as millions of Ukrainians have been displaced by war.

Kalush Orchestra received special authorisation from Ukraine’s government to attend Eurovision, since men of fighting age are prohibited from leaving the country, but that permit expires in two days.

Psiuk said he was not sure what awaited the band as war rages back home.

“Like every Ukrainian, we are ready to fight as much as we can and go until the end.

Britain’s ‘Space Man’

Ukraine beat a host of over-the-top acts at the kitschy, quirky annual musical event, including Norway’s Subwoolfer, who sang about bananas while dressed in yellow wolf masks, and Serbia’s Konstrakta, who questioned national healthcare while meticulously scrubbing her hands onstage.

Coming in second place was Britain with Sam Ryder’s “Space Man” and its stratospheric notes, followed by Spain with the reggaeton “SloMo” from Chanel.

After a quarter-century of being shut out from the top spot, Britain had hoped to have a winner in “Space Man” and its high notes belted by the affable, long-haired Ryder.

Britain had been ahead after votes were counted from the national juries, but a jaw-dropping 439 points awarded to Ukraine from the public pushed it to the top spot.

Eurovision’s winner is chosen by a cast of music industry professionals — and members of the public — from each country, with votes for one’s home nation not allowed.

Eurovision is a hit among fans not only for the music, but for the looks on display and this year was no exception. Lithuania’s Monika Liu generated as much social media buzz for her bowl cut hairdo as her sensual and elegant

Other offerings included Greece’s “Die Together” by Amanda Georgiadi Tenfjord and “Brividi” (Shivers), a duet from Italy’s Mahmood and Blanco.

Italy had hoped the gay-themed love song would bring it a second consecutive Eurovision win after last year’s “Zitti e Buoni” (Shut up and Behave) from high-octane glam rockers Maneskin.