History of Norway - Oil Age

Oil Age

Prospecting in the North Sea started in 1966 and in 1969 Phillips Petroleum found oil in the Ekofisk field—which proved to be among the ten largest fields in the world. Operations of the fields was split between foreign operators, the state-owned Statoil, the partially state-owned Norsk Hydro and Saga Petroleum. Ekofisk experienced a major blowout in 1977 and 123 people were killed when the Alexander Kielland accommodation rig capsized in 1980; these incidents led to a strengthening of petroleum safety regulations. The oil industry not only created jobs in production, but a large number of supply and technology companies were established. Stavanger became the center of this industry. High petroleum taxes and dividends from Statoil gave high income from the oil industry to the government.

Norway established its exclusive economic zone in the 1970s, receiving an area of 2,000,000 square kilometers (770,000 sq mi). A series of border disputes followed; agreements were reached with Denmark and Iceland in the 1990s, but the border in the Barents Sea was not agreed upon until 2010. Between 1973 and 1981 the country was ruled by the Labor Party, who carried out a series of reforms such as new school system. Farmers received increased subsidies and from 1974 women were permitted to inherit farms. Abortion on demand was legalized in 1978. Loans guaranteed in future oil income allowed Norway to avoid a recession during the mid-1970s. But by 1977 high wages had made Norwegian industry uncompetitive and a soaring forced cut-backs in public and private spending. Fish farming became a new, profitable industry along the coast.

An immigration surplus was established in the late 1960s, largely from Western Europe and the United States—from the 1970s increasingly expertise in oil. The period also saw an increased immigration of unskilled labor from developing countries, especially Pakistan, although regulations from 1975 slowed this significantly. Oslo became the center-point of immigration. The Alta controversy started in the 1970s when Statkraft planned to dam the Alta River. The case united the environmental and Sami interest groups; although Alta Power Station was built, the issue shifted the political climate and made large-scale hydroelectricity project difficult to built. The Sami Parliament was established in 1989.

The Conservative Party won the 1981 elections and carried out a large deregulation reform: taxes were cut, local private radio stations were permitted, cable television was established by private companies, regulations on borrowing money were removed and foreigners were permitted to buy securities. An economic crisis hit in 1986 when foreigners started selling Norwegian krone, which ultimately forced an increase in taxes and Prime Minister Kåre Willoch was forced to resign. The Progress Party, located to the left of the Conservatives, had its break-through in the late 1980s. The high wages in the oil industry made low-skill manufacturing industries uncompetitive and the Labor Party closed a number of public industrial companies which were receiving large subsidies. The 1980s saw a trebling of people on disability, largely amongst the oldest in the workforce. Crime rates rose.

The subsea Vardø Tunnel opened in 1982 and since the country has built subsea tunnels to connect island communities to the mainland. From the 1980s, the largest cities introduced toll rings to finance new road projects. A banking crisis hit Norway in the late 1980s, causing the largest banks, such as Den norske Bank, Christiania Bank and Fokus Bank, to be nationalized. Norsk Data, a manufacturer of minicomputers, became Norway's second largest company by 1985, just to go bankrupt by 1993. Unemployment reached record-high levels in the early 1990s.

By 1990 Norway was Europe's largest oil producer and by 1995 it was the world's second-largest oil exporter. Membership in the European Union was rejected in a 1994 referendum, with Norway instead joining the European Economic Area and later also the Schengen Area. Large public investments in the 1990s were a new National Hospital and Oslo Airport, Gardermoen—connected to the capital with Norway's first high-speed railway, the Gardermoen Line. A number of large government companies, such as Statoil, Telenor and Kongsberg were privatized. Lillehammer hosted the 1994 Winter Olympics. The end of the Cold War resulted in cooperation with Russia and reduced military activity. The Norwegian Armed Forces shifted their focus from defending an invasion to being mobile for use in NATO operations abroad and participated in the NATO bombing of Yugoslavia, the War in Afghanistan and the Libyan Civil War. The 2011 Norway attacks saw a Norwegian far-right terrorist bomb the Government Headquarters and Workers' Youth League camp at Utøya, killing 77 people.