Norway Oil Expedition

Norway is the fifth largest crude oil exporter in the world, and the largest in all of europe with its large amount of petroleum. It has managed to create a vast social welfare system over the years, being almost iconic in its independant success. For many years now, there has been no question of this, but as resources deterorite, Norway is in a position where it must seek new opportunities to expand.

The resources of the North Sea are Norway's primary source of crude oil reserves, but with new politics come new endeavors. With the election of Prime Minister Stoltenberg in september of 2009, Economic policies have called for the expansion into arctic seas for new petroleum and other crude oil reserves.

Since most of Norways funds are kept in a Sovereign WEalth Fund reaching almost $400 billion, the state has ensured itself the cost of exploration for new oil reserves, as well as the potential for economic decline due to immigration and taxes, as those are also major issues with Norway's economy.

In an earlier post, I mentioned that the Norwegian form of currency is the Krone. This is so because of their independance from the European Union. Above is a depiction of the exchange rate for the last 5 years from the dollar to the krone. Clearly you can see it has risen quite a lot since 1996, which at that time it was already at 6.4 krone per 1 U.S. dollar. Norway's independant and insular mindset has contributed to its prosperity and economic stability since the early 1990's.

I mention the early 90's because, Norway had a huge financial crisis with it's banks, dating to around 1984, when lending limits and interest rates dropped to staggering levels, leaving nothing but debt in their wake. This problem has been somewhat alleviated due tomacroeconomic policies being instated to compensate for rising inflation rates.

Norwegian interest rates are currently higher on the krone than EU interest rates on the euro. The norwegian currencies appreciation against the euro is largely due to the above factors, as well as government finances and external trade balance.