This roundtable will discuss challenges facing the Norwegian petroleum industry in view of the Paris Agreement and turbulence in the energy market. Hit by low crude prices, tightening climate change regulations, and the failure of past investment strategies, the Norwegian oil industry faces severe challenges. The way forward seems to lie in diversifying into green energy, drastically reducing operational costs, and/or consolidating through mergers.

New research finds that the prognosis for international oil companies was already grim before governments became serious about climate change and the oil price collapsed – their old business model is dying. Others, however, have found that resources are abundant, even if the costs of extraction are likely to go up. Large financial flows are channelled to fossil fuel production and consumption, including government subsidies for fossil fuel production and large institutional investments such as pension funds.

The Norwegian economy depends heavily on oil and gas. The oil and gas sector has rapidly grown over the past decade, and represents 22% of the Norwegian economy. Panellists will discuss questions such as: What are the main political economy and geopolitical challenges of restricting fossil fuel supply? Will the market or government regulations decide which oil resources remain in the ground? What is the impact for the Norwegian oil industry in the Arctic (Barents Sea) of a future where oil and gas must be “low-cost and low-carbon”? How should the Norwegian government handle the risk related to asset stranding? How will Norway’s international reputation develop if oil drilling in the Arctic continues according to current plans? For how long can Norwegian gas play a role in Europe’s energy future, given new climate policy goals? Will the Norwegian government be able to forgo extraction and its associated rents?