Publisher’s Commentary - Tina Olivero
What if Newfoundland was a lot more like Norway? In Norway, state-owned oil projects often
wells to be drilled. Not only is our drilling/
have upwards of 60% ownership in their oil
find ratio high, at one in five wells, but
and gas projects. This model of investment
we also have unprecedented exploration
in the energy industry has served them
happening like never before. One significant
well. Norway is now sitting pretty with the
find and we are on a fast track to future
largest nest egg in the world; A sovereign
projects and the same opportunities as that
wealth fund with over US$1 trillion in assets,
of the North Sea.
including 1.3% of global stocks and shares. In May 2018 Norway’s fund was worth about $195,000 per Norwegian citizen. It also holds portfolios of real estate and fixed-income investments. Newfoundland should do precisely that. Fund that Norway has created, pushes for more transparency and focuses on doing the right thing. It shuns individual companies and entire sectors like tobacco peddlers, and nuclear weapons makers because it’s the right thing to do. They operate from a higher good. They can afford to. That is a smart oil and gas strategy and societal formula. One we can all aspire to! Newfoundland, through Nalcor Energy, marginal
ownership
in
producing
oil projects, ranging from 4.9% to 10% equity shares. This model promotes jobs and short-term needs but loses on the long term investment growth and security model, that Norway has been so successful in achieving. Oil and gas production in the Norwegian Continental Shelf comes from 107 identified fields with 85 fields currently in production. Comparatively,
Offshore
be oil asset owners and managers. Canada should be smart enough to realize that oil and gas is the catalyst to new energy both from a monetary and infrastructure perspective.
The trillion-dollar Government Pension
has
But before we go any further, we need to
Newfoundland
has four oil-producing fields. It’s time to catch up!
Clearly, the smartest thing we can do with oil and gas is own our projects and use oil and gas to build new sustainable energy infrastructure. Oil and gas is the foundation of new energy coming on stream and given world demand it’s not going to be one energy source or the other; it’s going to be an energy mix of resources for the next 4050 years. Those are the facts. It’s time for Canada to invest in our offshore projects and create investment successes like that of Norway. Why not? We have a
proven
infrastructure,
the
perfect
investment climate, and unprecedented world-class
opportunity
offshore
Newfoundland. If Canada doesn’t get the perspective right
I often wonder what would happen if
when it comes to oil and gas, perhaps
Newfoundland
it would be right for Newfoundland to
Norway. I imagine a different future. Aligning
join Norway. In a time of globalization,
with the Norwegian model of developing
aligning with the world’s energy giant and
our oil and gas, fishery and tourism sectors
masterful investment strategist just might
would allow Newfoundland to flourish as
be the ultimate solution for our kids here in
Norway’s has. That idea would entirely
Newfoundland and Labrador. Having said all
change Newfoundland history!
This year and the next Newfoundland will
that, it looks like the next 2 to 5 years will
have upwards of six aggressive drilling
see the most prolific growth in the industry
players offshore, with an estimated 80+
to date, offshore Newfoundland.
left
Canada
and
joined
It’s a thought!
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