Norway warns on energy transparency
By Carola Hoyos in London
Published: October 15 2006 22:40 Last updated: October 15 2006 22:40
Norway’s foreign minister has warned that achieving financial transparency in the murky world of oil and other national resources has become more important, but also more difficult in the past two years.
As the oil price has trebled, governments of oil-rich states, Russia, Venezuela and Bolivia, have wrested more control over their precious resources from international companies, and willingness to disclose the revenue stream they have created has diminished.
Johnas Gark Store, Norway’s foreign minister, said in an interview: “It’s all the more important and challenging when you are dealing more and more with governments and national oil companies that have the tendency to be more secretive.”
Mr Store was speaking on the eve of Monday’s Extractive Industries Transparency Initiative meeting in Oslo, where governments and companies expect to develop voluntary reporting standards that would hold governments and oil companies to account over how much they are paid for their resources. Norway is widely seen as the only energy-rich country not to have the curse of corruption and poverty, and is likely to take over the leadership role of the EITI from the UK, which founded it in 2002.
“The initiative becomes even more important in times of high prices because income becomes more intense,” Mr Store said. The past three years have not only seen oil prices surge, but other commodities such as copper and gold have reached record prices as well.
Many of the world’s 3.5bn poor people live in resource-rich countries. In some such as Nigeria, Africa’s biggest oil producer, their continued poverty has led to instability, hostage-taking and rebel attacks against oil installations. In Iraq, which has the world’s third largest reserves of oil, pipelines are a favoured target of insurgents angry with the instability that has followed the US toppling of President Saddam Hussein.
In Russia, high oil prices have led the Kremlin on a campaign to resume full control of the country’s vast resources. Most recently Gazprom, Russia’s state gas monopoly, announced it would develop the giant Arctic Shtokman gas field without foreign help. The decision, which will also see gas that had been destined for the US redirected to Europe, was widely seen as a political manoeuvre in the battle between Washington and Moscow over Russia’s bid for membership of the World Trade Organisation.
Joseph Stanislaw, founder of the JAS Stanislaw Group consulting firm, said: “The whole issue of transparency is critical to international politics. Energy is central to every national topic, including national security. For countries that are not democratic or transparent, why should they give up their advantage by making public their energy data?” He added: “Energy is a tool of foreign policy. When prices are high it becomes even more essential for those who have it to keep control of it and its data as a tool of wealth and influence.”
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