Seventy years ago, it was far from obvious that Norway’s economic future lay hidden beneath the seabed. Postwar Europe was searching for stable energy sources to accelerate reconstruction and spark economic growth, ideally in the form of oil and gas. But experts did not consider the North Sea a particularly promising candidate. That is, until the Dutch discovered gas in Groningen. Then everything changed.

This discovery was so large that it reverberated far beyond the Netherlands. In Norway, it prompted a simple but transformative question: if such resources exist on land there, what might lie beneath the seabed along the Norwegian coast?

Optimism surged in Norway. Rich traditions of maritime value creation gave confidence that it could manage the complex task of recovering such treasures as might be present in the deeps. The Groningen discovery provided no guarantee, but it increased the probability and exploration preparations intensified in the early 1960s. 

This proved a decisive period for Norway’s petroleum industry. The country realised that, if major discoveries were eventually made on the Norwegian continental shelf, one thing had to be clarified in advance – what did this area comprise? 

Work on determining the continental shelf boundaries began well before the first discoveries were made. That looks like a very sensible choice. It was probably easier to settle these questions when the assets were theoretical, and before anyone knew exactly where they lay.

Agreements with the UK and Denmark in 1965 and 1966 established these boundaries on the basis of the median line principle, which places them equidistant from both coastlines. These treaties attracted limited attention at the time, but they would prove crucial. The framework was in place long before the first major discovery – and thereby before any potential conflicts.

What remained was actually to find something. After several years of drilling, the breakthrough finally came. The optimism proved to be justified, and Groningen was not unique. 

On 23 December 1969, Phillips Petroleum notified the Ministry of Industry that it had discovered a major oil field in the Norwegian sector of the North Sea. However, the general public did not learn of it until six months later, when Oslo daily Aftenposten ran a front page story on a giant field which exceeded all expectations. 

Later named Ekofisk, this ranked at the time as the world’s largest offshore petroleum discovery, an “offshore Groningen”. Phillips had a practice of giving promising discoveries the English name of a fish with the same initial as the block letter. In block E, however, it ran out of suitable names and simply invented one that sounded Norwegian.

Ekofisk was the first commercial discovery on the Norwegian continental shelf, and is still producing more than 50 years later. Norway is universally known as an oil and gas nation today, but not everyone knows that this was when it all began.

The field immediately changed the basis of the national economy and thereby of Norwegian politics. The question was no longer whether the country had any significant oil and gas resources, but how these should be managed.

Becoming an oil nation overnight was by no means simple. Fortunately, Norway was not the first country to find petroleum, and it could learn from the experience of others. These lessons were not uniformly positive – a number of countries had found that possession of big natural resources led to short-term decisions, economic imbalances and loss of control. Norway took that seriously.

In 1971, the Storting (parliament) adopted 10 “oil commandments” – a set of guidelines on how Norway’s oil and gas resources should be managed which have exerted a strong influence ever since.

They built on the government’s view that, in principle, the natural resources on the Norwegian continental shelf should benefit society as a whole, and deserve to be presented in full:

The following year, two institutions were established to put these principles into practice. The Norwegian Petroleum Directorate (now the Norwegian Offshore Directorate) was tasked with resource management. Statoil (today Equinor) became the state-owned oil company – an operator responsible for commercial activities as well as for building experience and expertise in Norway.

This deliberate separation between administration and business was conscious and forward looking. The state would both own the resources and participate in value creation, but these roles were kept distinct. Other state institutions and companies have since become part of Norway’s ever-expanding energy landscape, but these first two undoubtedly played a crucial role in shaping today’s energy nation.

These institutions were not named the Gas Directorate and Statgas for a good reason. Ekofisk was primarily an oil field, and in the early years the gas was flared rather than sold.

Fortunately, Norway also had oil commandment number 5 – which could well be termed gas commandment number 1:

“Flaring of exploitable gas should not be accepted except for short test periods”.

It was not long before flaring was virtually eliminated.