Regulation of the Upstream Petroleum Sector

Regulation of the Upstream Petroleum Sector

A Comparative Study of Licensing and Concession Systems

New Horizons in Environmental and Energy Law series

Edited by Tina Hunter

This discerning and comprehensive work will be a useful entry point for students embarking on study in petroleum law. Academics will find this timely examination to be an indispensible overview of upstream operations. Practitioners will find this book an illustrative review of the origins of issues surrounding regulatory frameworks in managing natural resources.

Chapter 5: Regulation of the Norwegian upstream petroleum sector

Ernst Nordtveit

Subjects: law - academic, commercial law, energy law


Norway became a petroleum producing country in the early 1970s. Up to the early 1960s it was not expected that petroleum could be found in Norwegian land or sea areas. The discovery of natural gas in Groningen in the Netherlands in 1959, however, led to an interest from some oil companies to explore for petroleum further north in the North Sea. In October 1962 the Norwegian authorities, to their surprise, received an application from the American oil company Phillips Petroleum for an exploration license in the Norwegian part of the North Sea. The Norwegian authorities regarded this as an application for an exclusive license. This was unacceptable to the Norwegian authorities, but the interest from the oil companies made them think that it might be timely to establish a legal regime and a policy for handling the interest in petroleum activity. A small group of people in the Ministry of Foreign Affairs led by Jens Evensen took the initiative to establish a legal framework for possible future activity. In May 1963, the Norwegian government proclaimed sovereignty for Norway over the Norwegian continental shelf, based on the Continental Shelf Treaty from 1958. An Act on submerged areas was also passed by the Norwegian parliament, Stortinget. The main provisions in the act were that any natural resources on and under the ground of the subsea areas belongs to the Norwegian State and that exploration and production will be subject to a license from the King.

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