The Mellbye commission

Norwegian Petroleum Museum

Statoil’s reaction was clear when the Mellbye commission presented its report on reorganising state participation in Norway’s petroleum industry. This was not a case of clipping the company’s wings, but of amputating them.

— Radio room at Statfjord A. Photo: Odd Noreger/Norwegian Petroleum Museum

The background for the commission’s work was concern in the Conservative government headed by Kåre Willoch about the concentration of economic power in Statoil. Based on estimates for the pace of North Sea development and oil price increases, forecasts in 1980-81 indicated that the company could control a third of government revenues by 2000. Soon after taking office following the 1981 general election, the Conservative government appointed a commission to study options for making changes to Statoil’s role.

This Mellbye commission proposed two principal measures for limiting the state oil company’s growth and reducing its potential for acquiring power. One was that a large proportion of Statoil’s income should go straight to the Treasury, and the other was a change to voting rules in each licence so that Statoil would no longer have a majority and right of veto on its own.

The first of these proposals would give the government control of a percentage of each licence with a Statoil holding through the state’s direct financial interest (SDFI). This proportion would vary from licence to licence. Strong opposition to the Conservative proposals for “clipping Statoil’s wings” was expressed by the Labour Party. But it nevertheless issued an invitation to talks in the spring of 1984, which led to a cross-party compromise.

The government did not yield on the principles in its reform package, and the outcome was largely in line with the Mellbye commission’s proposals. But there was one key exception – the Statfjord licence was excluded from the division into Statoil and SDFI shares. This field was Statoil’s largest and most important source of revenue. Thanks to its exemption from the reform, the company could continue to secure a high level of income from it.

To learn more, see: The reorganisation of Statoil .

Source
Norwegian Official Reports (NOU) 1983, 16. Organiseringen av statens deltagelse i petroleumsvirksomheten .
Krogh, Finn E. “Reorganiseringen av Statoil”. Norwegian Petroleum Museum Yearbook 1997