(Dow Jones Newswires), March 4, 2011
Norway has appointed Ola Borten Moe as its new minister of petroleum and energy, the government said Friday.
Borten Moe replaces Terje Riis-Johansen, who has been in the post since 2008.
"I'll take over with great excitement and humility. I look forward to this," Borten Moe told reporters on Palace Square in Oslo. "I will continue the work carried out for the last five-and-a-half years with the Center Party in government."
The appointment should have "no impact on the markets" said Stein Bruun, chief economist for SEB bank in Norway.
"In Norway at least this has been expected for some time," Bruun said. "Foreigners might take another view but I don't see a lasting effects on markets."
Like Riis-Johansen, Borten Moe is a member of the Center Party, which governs Norway in a coalition with Prime Minister Jens Stoltenberg's Labor Party and the Socialist Left Party.
Borten Moe is seen as a rising star within the ranks of the Center Party, which has strong links with the agricultural sector, and he is tipped for promotion to second-in-command, and ultimately may be a future party leader.
The new minister will face some stiff challenges including balancing the competing needs of Norway's fishing and oil industries, said Steve Robertson, head of the oil and gas team at U.K. consultant Douglas Westwood.
"The hydrocarbons and fishing industry are in the same space and so the actions of one industry can severely affect the other," said Robertson. "The oil spill in the Gulf of Mexico has brought into focus the risks associated with offshore oil and gas production and if such a thing were to happen to Norway that would be a disaster for the fishing industry."
Whether to allow oil and gas drilling off the coast of the Lofoten islands and Vesteralen has divided opinion in Norway, with concerns being voiced that fishing grounds could be affected.
In the longer term, opening up the Arctic for exploration will present a key challenge to the Ministry of Petroleum and Energy, Robertson said. Managing fiscal incentives to encourage oil companies to extract as much as possible from maturing Norwegian fields will also be vital, Robertson said.
Data released in January show total Norwegian petroleum production in 2010 fell 4% compared with the previous year, to 230 million standard cubic meters of oil equivalents, and production is forecast to continue to decline.
The figures caused Norwegian officials to call on petroleum companies to redouble investment efforts to exploit more from existing wells.
Former minister Riis-Johansen is leaving following criticism of his handling of the building of a carbon capture and storage plant at Mongstad, Norway.
"The government announced this project as 'Norway's journey to the moon' and it has been delayed quite a few times so there has been a loss of confidence," said SEB's Bruun. "While this has been a problem for the whole government the [petroleum and energy] minister is the man responsible."
Plans by the Petroleum and Energy Ministry to build power lines in western Norway have also proved unpopular with voters on environmental grounds and may have hastened the minister's exit, Bruun said.
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