H.E. Erik Solheim, Minister for International Development of Norway since September 2005, underscores in this special article from the Ministers’ Rostrum the importance of the petroleum sector for developing countries. He presents Norway’s “Oil for Development” programme that focuses on good governance, transparency and anti-corruption with regard to resource and revenue management as well as environmental protection. He reconfirms Norway’s strong support to the Joint Oil Data Initiative managed by the IEF Secretariat.
Norway has, within the “Oil for Development” programme provided the Secretariat with a special financial grant to promote JODI among developing countries, additional to Norway’s generous annual financial contributions to Secretariat activities. Norway co-sponsored the Regional JODI Training Workshop organized by the IEF Secretariat and the Ministry of Minerals and Energy of South Africa in Johannesburg 30 January to 2 February this year.
Mr. Solheim has long played a prominent role in Norwegian politics and was the leader of the Socialist Left Party from 1987-1997. He is internationally known for his role as peace facilitator in Sri Lanka.
Energy security, climate change, government transparency, corruption and prosperity are words all closely linked with oil - for good and for bad. As a Minister for International Development, I am concerned, but also optimistic, about the increasing shift of investments that we see in the petroleum sector, from developed countries to some of the world’s poorest countries. Facing the challenges of good governance, corruption and wealth creation becomes more important than ever. Environmental degradation is yet another consequence of corrupt systems, contrary to environmental protection being a result of good governance. In the 1960s, international oil companies came to Norway with many “good offers” for extracting Norway’s oil resources, one was to take on exclusive rights to our entire continental shelf. Jens Evensen, a key government official, wisely responded: “We understand you are interested in exploring for oil in the North Sea. We hold the rights to this and we do not intend to grant any license before we know what we are doing. We quite simply give you a challenge: Educate us!” I am deeply honoured by the many governments now seeking our advice. Norway has a responsibility to share its experience.
Norway’s “Oil for Development” programme was launched focusing on good governance, transparency and anti-corruption. The initiative builds on three main thematic pillars: resource management, revenue management and environmental protection. Cooperation under the initiative include several countries, one is Timor Leste, the world’s youngest, and one of the poorest countries in the world. Lacking basic competence and government structure, the securing of the petroleum revenues was at stake for Timor Leste, as it was for Norway 40 years ago. Support includes institution building, legal framework, petroleum fund, transparent licensing system and education. Added revenues to the East Timor nation of more than USD 10 billion over the next 20 years have been secured through tough negotiations with neighbouring countries. The Oil for Development team provided support to this, as it did in securing the legal framework to pass Parliament in 2005. The “sustainable” income from the established Petroleum Fund (reached USD 1 billion) will from this year be available to the benefit of the young nation. The 1st offshore license round has been successfully completed in a transparent process. The first Timor Leste students supported by the initiative will graduate from universities next year. Oil for Development has become a pillar of Norway’s development work. I am convinced that this initiative – together with others - will give sufficient impact to make the petroleum industry more transparent and environmentally sustainable. I will mention three such initiatives supported by Norway and also highlighted at the G8 summits at Gleneagles and St. Petersburg.
Three Initiatives
The Joint Oil Data Initiative (JODI) has proved an important tool for establishing more transparent and reliable oil statistics. My compliments to the Secretariat of the International Energy Forum, co-ordinating the initiative, today with more than 90 countries providing data, and with the recent successful training workshop for officials from sub-Saharan African developing countries in Johannesburg, which Norway was happy to co-sponsor.
The Extractive Industries Transparency Initiative – EITI launched by British Prime Minister Tony Blair at the 2002 Johannesburg Summit, supports improved governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining. I am proud to accept to host the EITI Secretariat for the next period, following the UK.
The Global Gas Flaring Reduction Initiative (GGFR) was launched by the World Bank and Norway, also at the Johannesburg Summit. Most of the gas flared today – 85% - is flared in developing countries. This equals 25% of the US gas consumption!
Norway will take active part when Ministers meet at the 15th Session of the United Nations Commission on Sustainable Development in New York in May to further discuss some of these most important challenges that the world is facing.