Norway gov’t to aid Mexican energy

Norwegian Minister of Foreign Affairs Børges Brende.

By J.E. COLLINSON
thenews.com.mx
The News


MEXICO CITY – The government of Norway plans to assist in the development of Mexico’s energy sector following the structural reforms, focusing on the interplay between energy, economics and the environment, said Norwegian Minister of Foreign Affairs Børges Brende at a seminar Friday.
Despite their cultural and geographic differences, Mexico and Norway actually have much in common when it comes to energy: they both are blessed with great oil wealth and have rapidly growing renewable sectors, he said.

Given the similarities, both countries seek to implement diversified, long-term solutions to meet energy needs, that respect issues raised by the potential consequences of climate change, said Mexican Nobel Laureate, Dr. Mario Molina.
 

This constructive dialogue is aimed at bringing Mexico forward, ensuring that what happens in the energy sector will be inspired by care for environment, Brende said.

“Mexico is starting a new and exciting chapter in its energy sector, and today’s discussion is very timely,” he said. “In 40 years, Norway has gone from having no upstream oil and gas at all, to becoming a major exporter, with a total oil and liquid gas production of around 1.9 million barrels a day. We are also the third largest exporter of natural gas in the world, and 20 percent of Europe’s consumption comes from Norway.”
 

“Our experience shows it is possible to develop energy markets while safeguarding the environment. Norway has always given priority to sustainable and responsible management of our natural gas resources,” he said.

Petroleum was essential in fueling Norway’s growth, and since oil was first discovered in the Norwegian continental shelf on Christmas Eve, 1969, the oil and gas industry has added $1.6 trillion to Norway’s GDP, he said. However, two decades ago, the government made the vital decision not to allocate the running revenue from the oil and gas sector into their state budget, but rather to add it to a sovereign wealth fund, and then use the interest on that fund in their economy.

Thanks to that decision Norway’s sovereign wealth fund stands at $1 trillion – the largest in the world – and Norway holds an average stake of 1.5 percent of all listed companies globally. The interest on the fund is now so large, he added, that it cannot all be allocated into the state budget for risk of overheating the economy.
 

This experience demonstrates that, even with large oil and gas reserves, it is possible to avoid the so-called “Dutch Disease” – the negative impact a sudden flow of foreign currency can have on an economy, as some fear will happen following the structural reforms.

More importantly, he said, it is possible to have an oil and gas industry that is not only profitable and competitive, but that also respects the environment, provided that you set strict safety and environmental standards, based on sound resource management principles for companies operating offshore.

“After oil and gas, Norway’s second largest exporter is the marine sector. During the ‘70s, when we started the oil and gas industry, activists were saying this would be the beginning of the end for the fisheries sector. However, last year, we took out one million tons of arctic cod from the Nordic Sea – the cleanest and the richest sea in the world – and at the same time we had the oil and gas industry operating in the same area. As long as you stick with the strictest rule, this is possible to combine the two,” he said.

Mexican Secretary of the Environment and Natural Resources, Pedro Joaquin Coldwell, welcomed Norway’s collaboration to Mexico’s energy.